Not measuring the outcome of your digital campaigns after pouring in time and money into it is kinda like driving a Lamborghini without a speedometer, you think you're going fast but since you can't compute it in your mind, you can't truly feel it. We quantify, evaluate and optimize otherwise what's the point of it all, might as well go traditional and hope for the best.

Here are my Top 8 digital advertising metrics that will help you understand and optimize you campaigns better. Some are quite obvious, others quite interesting and all together they make for quite a fascinating assemblage.

  • Cost Per Click(CPC) - Starting off with the most basic, how much is each click costing you.

CPC = Cost / No of Clicks

  • Cost Per Impression(CPM) - This metric is mostly on the sidelines but useful if your goal is to get the most eyes on your Ad instead of clicks and conversions. When we're talking about CPM, cost is calculated per thousand served impressions.

CPM = ( Cost / Impressions ) x 1000

  • Click Through Rate(CTR) - It is a measure of quality of Ad creative or copy. What percentage of people who saw your Ad ended up clicking on it ?

CTR = ( Clicks / Impressions ) x 100

The average click through rate across all industries on search is 1.91% and 0.35% on the display network.

  • Conversion Rate(CR) - This is also a familiar KPI, most often used for eCommerce businesses to determine what percentage of users clicking on the Ad end up making the purchase. There could be a thousand reasons why your conversion rate is unsatisfactory, from something obvious like non competitive prices to lack of fluid checkout design. You have to A/B test different elements and make incremental improvements to ensure your audience is not bouncing on each visit.

CR = No of Conversions / Clicks

Conversions can also be measured for Sign-ups, downloads, phone calls and other inquiries. The average conversion rate across all industries is 2.7% on search and 0.89% on display.

  • Return On Investment(ROI) - The elusive metric every C-level executive wants to know "What is the ROI you're expecting on this campaign ?"

ROI = ( Revenue - Cost ) / Cost

Annoying as it may be, it does offer some insight into your campaigns.

  • Average Order Value(AOV) - Your conversion rate might be great but if your users are consistently buying mobile cases instead of actual smartphones then there is problem. That's where AOV comes into play, if users are not touching a certain category or product then you might want to re-consider your content strategy. Ain't nothing to do but up-sell.

AOV = Revenue / Conversions

  • Cost Per Acquisition(CPA) - Any Shark Tank fans ? You'd definitely know this if you are.
"How much does it cost to make and what is your cost per customer acquisition?"

If your marketing is not targeted towards the right audience, you'll end up spending money unnecessarily thereby increasing your cost to acquire a customer. No point in showing your Ads on mobile if all your sales are coming through desktop and tablets.

CPA = Cost / Conversions

Follow the Pareto Principle or 80/20 rule, 80% of your sales comes from 20% of your products & 20% of the locations you're targeting. Focus on those categories, products and locations to optimize your CPA.

  • Active View Viewability(AVV) - This metric is the reason by CPM is not preferable, reason being, the impressions data you see are "served" impressions and not necessarily viewed by the user. Hence Active View Technology was developed by Google to give advertisers a perspective and allow them to choose their placements accordingly. An active view viewable impression is counted if at least 50% of the Ad is visible for at least 1 second.

AVV = ( Active View Viewable Impressions / Impressions ) x 100

In AdWords, Active view viewable impression is found under performance(active view). You can add AVV in AdWords by using custom formula under columns and adding the equation above.

There you have it, the Top 8 digital advertising metrics, collectively these have provided a ton of insight into my campaigns and has really helped me organize my optimization techniques, I hope it does more if not the same for you.

Let me know if you think there are other metrics and KPI's that deserve to be here and why.