Top-performing ecommerce brands have shown that running marketing campaigns without the tools in place to gather and analyze the right data is not a winning strategy.
But many of us are using tools that don’t provide the critical metrics we need to make better campaign optimization decisions.
When we asked our merchants what key metrics they relied on throughout the month to optimize campaigns, these were the top ones they listed.
By channel and by campaign:
- Customer Value: calculated for the timeframe being analyzed by dividing the revenue generated by a campaign by its number of unique customers. For many businesses, subsequent purchases may be the main driver of this number but, regardless, comparing the value of customers brought by a campaign over a timeframe to the cost of acquiring those customers will assist you in assessing the value of each campaign.
- Initial Purchases: understanding the channels and campaigns responsible for driving initial purchases will allow you to focus on those delivering the best results, and possibly adjusting your budgets assigned for each or eliminating non-performers.
- Subsequent Purchases: if subsequent purchase rates are the lifeblood of your business, it’s critical to identify the marketing channels and associated campaigns that are attracting customers who will remain with you and purchase repeatedly. High performing campaigns driving repeat purchases can be considered, for example, for increased CPC bids if increased Customer Acquisition Costs will be offset by the next purchase(s).
- Average Order Value: unlike Customer Value which is a metric driven by the number of unique customers, average order value is a reflection of the number of unique orders. Again judge your campaigns using this metric by their effectiveness in contributing to increased order values over time.
- Number of Orders: a key measure of the effectiveness of each channel or campaign when combined with Average Order Value in delivering users who buy your products.
- Customer Acquisition Cost: a key factor in assessing the performance of your paid campaigns and a key measure of the campaigns that are clearly delivering positive economic results when measured against the Customer Value of the campaign.
- Comparatives by Attribution Model: this allows you to understand how effective campaigns are in driving purchases based on various models:
- First Click Attribution assigns 100% of the credit for a purchase to the channel/campaign that first delivered the user to your site;
- Last Click Attribution assigns 100% of the credit for a purchase to the channel/campaign interacted with immediately before the purchase;
- Linear Attribution assigns the credit for a purchase equally to all of the channels/campaigns interacted with leading up to a purchase.
Comparing these, one against another, will give you a more holistic view of the results of each campaign (e.g, a campaign that you might dismiss because of weak last click performance may be one of your strongest campaigns in recruiting new prospects (first clicks) that later converted through another channel (e.g., email).
- Conversion Time Lag: this is the average time in days that it takes users from each campaign to move from the first interaction with your site to a purchase. This data can help you when forecasting future revenue from each campaign. You can also compare the time lag for campaigns to the Average Conversion Lag for your site overall to understand its relative performance compared to other campaigns.
- Touchpoints: this gives you visibility into the number of interactions (visits to your site) that each channel or campaign averages for a user to convert to a purchaser. How this varies by channel and campaign can help you understand how to prioritize your campaigns for different objectives (e.g., your most effective remarketing campaigns)..
- User Journey Funnel: these come in different implementations but each typically illustrates graphically the path a user took from their first interaction to their last one prior to a conversion (e.g., a purchase). Each of these steps is a touchpoint that typically had an external source (e.g., a click on a call-to-action in an online ad or an email newsletter). The funnel report itself could illustrate each touchpoint by channel (e.g., paid search, email, etc.) and provide information on its date and source (e.g., campaign). The User Journey Funnel can be a valuable visual tool in identifying the most popular paths to conversion on your site.
These 10 “must-have” metrics will provide a framework for strategic decision-making. Applying them consistently throughout the month will enable you to make better informed decisions when optimizing your campaigns … from increasing revenue, to improving ROI, and focusing on the customers who are most critical to the success of your business.
Learn more about AdAmplify’s Dimension Attribution platform