The digital advertising landscape is changing...

and ad tech is giving brands the ability to reach their audiences through a huge range of different and engaging ad formats. Furthermore, we now have access to unseen levels of data allowing us to monitor user interactions to the finest degree.

Traditional methods of measuring performance are becoming less relevant as advertisers campaign goals focus towards brand-based metrics, many of which are extremely difficult to measure- how can you record the number of high street sales made from users who have viewed a digital ad?

So what metrics are brands using to gain an indication of campaign performance? The following is a breakdown of popular key performance indicators for contemporary ad types: Display, Native, Search and Video:

Video

The majority of video campaigns are based around building brand awareness meaning performance can be very difficult to measure. There are a huge variety of video ad options with an increasing number of interactive formats entering the marketplace. This means there is a labyrinth of user data transferable to a range of performance metrics:

  • Impressions are measured in video campaigns as an indication of the total number of ads served. An impression is only fired if it complies with the IAB’s digital measurement guidelines.
  • Click-Through Rate captures an active user response. It is no longer counted as an important metric for most video campaigns although it is still regularly measured.
  • Completion Rates are used to determine the percentage of plays that have reached 100% completion.
  • Percentage Complete measures the number of users that have partially played an ad up until intervals of 25%, 50% and 75%.
  • Time Spent Viewing is the measure of seconds that an ad has been played; this includes any time added by rewinding the content.
  • Brand Health metrics include ad favorability, purchase intent and message recall.
  • Interactive Ad Formats come with a range of performance metrics based around their features. Examples of this include: Accept invitation rate and user activated control rate.
  • Player Operation Metrics cover user interactions with the player such as: skip, player expand, player collapse, audio mute, un-mute, rewind and pause.
  • Cost Per Mille stands for cost per 1000 ad impressions. CPM is a popular pricing model for video and can be used to measure performance against cost.
  • Viewable Cost Per Mille stands for viewable cost per 1000 ad impressions. VCPM has grown popular in recent years due to surfacing viewability problems.
  • Effective Cost Per Mille stands for effective cost per 1000 impressions. ECPM measures the cost per impression by dividing total campaign revenue by the total number of campaign impressions. 

Display

Initially, display relied on interesting creative to drive clicks and conversions and it saw an extremely high Click-Through Rate (CTR) part driven by consumer curiosity. Fast-forward to 2015 and the consumer has become immune to display advertising, you are now more likely to win the lottery than to click on a banner ad.

The effectiveness of display’s once popular performance metric, CTR, is being questioned along with its standard payment model, CPM• (see Cost Per Mille)

Essentially, trying to reach a potential customer with display advertising is like looking for a needle in a haystack. The problem is you’re not just looking in the haystack — you have to buy the whole haystack first.Rachel Balik, Demandbase

  • CTR does remain a common metric and the majority of display campaigns are still priced at CPM, but, as new ad formats are developed these metrics are losing their relevance. We are seeing an increasing amount of advertisers swaying away from clicks and CPM as metrics and beginning to adopt new methods of measuring campaign effectiveness.
  • Reach is the number of unique impressions. This metric is used to ensure that the same ads aren’t being served numerous times to the same person.
  • Engagement Rate (%) The percentage of people that engage with a display ad. This is a common metric of rich media and other interactive display formats.
  • Engagement Time (seconds) measures the length of time in which a user is engaging with the ad, whether this is hovering, scrolling or interacting with an expandable ad.
  • In-screen Impressions measure the number of times a display ad has come into frame on a users device in one session.
  • Cost and pricing models can be used to calculate campaign ROI. Display is usually priced at CPM (cost per mille), CPC (cost per click) and CPA (cost per acquisition). 

Native

Native advertising has gained popularity for its ability to raise awareness, drive engagement and increase brand affinity. However, there is much debate within the industry about the most effective way of executing and measuring campaigns. Publishers and advertisers are battling over whether it should be branding metrics or performance metrics at a time when there is no standardised process in place. The versatility of native content allows advertisers to set a wide range of campaign goals and this means monitoring metrics based around engagement, performance and brand lift.

  • Engagement metrics cover user actions such as clicks, click-through rate, unique visitors, time spent with brand content, page views, scroll initiation, scroll depth and scroll velocity as a proxy for attention, how long a native ad unit is within view even if it is not clicked and the average time spent reading.
  • Brand Lift metrics include shares via social media or dark social, change in social media followers or email subscribers, traffic to websites and social media channels.
  • Performance metrics cover the likes of conversions and new and returning customers. One way brands can measure a campaign based on conversion is by using product-recommendation modules to suggest products to the user after they’ve read the native content.

The majority of native pricing models are based around CPM although some publishers have begun charging at CPE (cost per engagement) in the form of page views. Another popular pricing model involves charging a premium CPM for the accompanying display inventory.

 

So what does the future have in store for native? It’s expected that the majority of native campaigns will be based around audience reach and average attention minutes. Future performance metrics will depend on how the boundaries of the content itself change and the advertiser’s individual campaign goals.

Search

Compared to other ad types, search has a relatively straightforward set of performance metrics based around clicks, conversions and raising brand awareness. The medium is mostly unchanging; advertisers are paying a search engine to promote their digital content above their competitors based on keywords. The important metrics are as follows:

  • Quality Score is Google’s metric for search campaign performance that is given as a score out of 10. This score determines the position and price of a PPC search ad. The score is based on expected CTR, Landing Page Experience and Ad relevance (relevance of copy/keywords)
  • Impressions are a key metric for search campaigns. Advertisers want to be seen ranking at the top of a search for keywords in their industry, impressions from search generate awareness and website traffic leading to leads and conversions.
  • Click-Through Rate, much like impressions, will always be an important metric for search advertising. Measuring click-through enables the advertiser to see the percentage of users that have actively engaged with the ad.
  • Average CPC allows the advertiser to gauge the return of their campaign with regards to cost. This metric is transferable to other types of digital advertising. If the advertiser is looking to drive traffic to their homepage they can take this metric and compare it to other campaign types to gauge effectiveness.

Every search ad is made up of the same components, a title tag, a URL and a meta description, therefore, campaign goals tend to be relatively constant from advertiser to advertiser. Other search performance metrics include conversion rate, cost per conversion, wasted spend, cost and CPA.

 

As the ad tech landscape grows new ad formats enter the marketplace, these ads will soon grace the screens of new devices on your wrist, in your self-driving car and on your fridge. With all these new ways to reach the consumer, brands hunt for an accurate way to measure campaigns, but, despite the vast quantity of data available, it still remains extremely difficult to gauge an accurate measure of performance. Currently, brand-based metric tracking is challenging, as soon as the user goes offline a brand no longer has the capacity to track user activity.

So, as the world becomes more connected, will advertisers be able to track every engagement a user has with a brand following an ad impression, therefore providing 100% accurate performance metrics?

 

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