Digital Measurements that Matter

Impressions to Conversions

Before we dive right into this topic, I want to set the stage by reviewing the marketing path to conversion.

We usually begin the path the conversion with an impression, whether it’s a digital ad impression or an estimated impression from a magazine ad. Impressions should eventually funnel all the way down to a lead, sale, or conversion. Understanding that all impressions serve a purpose in the marketing sales funnel is essential, and defining that purpose should be step one. It’s even more important when buying ads based on impressions.

Yes, I just said that.

In many ad spaces, ads are purchased using cost per thousand impressions, or CPM. (The M stands for the roman number M, which represents 1000. I know, it’s silly.) That means if you want to reach 1,000,000 views at a cost of $1.00 CPM, you’ll have to pay $1,000 to buy those impressions.

This pay-to-play concept is very important drill in on, as the method of ad purchase should also relate back to the performance of the ad. Remember, we’re paying to display to an audience that we feel will be interested in our product. If we want to both spend smartly while ensuring the right people see the ad, we need to track the cost of showing an ad to that particular audience, aka that particular ad buy, with the appropriate actions along the customer funnel.

Let me break this down in an example:

Placement Impressions CPM Conv Conv./Imp. CPConv.
Webmd.com 500,000 $1.20 10 0.002% $60
msnHealth.com 500,000 $1.00 2 0.0004% $250

First of all, yes I’m using digital ad metrics in this example because it’s the easiest to track. But the same principle stands for any other channel.

Let’s start with the CPM of each placement. With Webmd.com, you’d get 500,000 impressions for $600. With msnHeatlth.com, $500,000 would only cost $500. For many ad buyers, the best bang for their buck would be with the latter, as they’d get more impressions for less money.

But if we follow the bouncing ball all the way through the customer journey, we see that of the 500K impressions on WebMD, 10 of those impressions converted. (And here we are using the term conversion to represent filling out a website form.) So the $600 spent on WebMD essentially turned into paying $60 a person to fill out a lead form. If we use the same math on msnHealth, we see that only 2 of those impressions converted, which means the $500 spent on msnHealth represents paying 2 people $250 to fill out a lead form. Which one sounds better now?

What this turns into is that the audience viewing the ad on WebMD was a better target audience than the audience on msnHealth. This concept is similar to setting up a vinyl record booth at a Spotify convention vs. a 70s rock convention. Both of these audiences are probably 30 yo men that listen to music, but with very different outcomes.

I know you're all screaming at me:
What about awareness???

Of course, ad impressions are easy to track if you have an immediate conversion, but what if the purpose of the ad buy is awareness?

The good news about awareness is that it is still trackable. While there may not be a lower-funnel conversion, there are still activities you can track and use as conversions. Perhaps a view-through page counter pixel would be ideal in understanding the long-term effect of people that saw the ad.
We can essentially use the same table as we did above:

Placement Impressions CPM View-Though Pageviews VTP/Imp. CPConv.
Webmd.com 500,000 $1.20 25 0.005% $50
msnHealth.com 500,000 $1.00 17 0.0034% $30

In this example we’ve changed the conversions column to view-through impressions. So now we are tracking impressions shown to users that later ended up on the webpage we wanted them to visit.

With this data we see we are paying 25 people from WebMD $50 a pop to visit our website. However, on msnHealth, we’re only paying $30 a pop. In this case, it would be more cost effective to serve ads on msnHealth, given the purpose is to get people to the website, aka, awareness.

How am I supposed to know all this when I’m starting a campaign?

The thing is with tracking impressions to conversions, is that you don’t know until you start running the ads. The most important things to start with are

  1. Understanding the purpose of the ad
  2. Setting up tracking to measure the purpose
  3. Using the data along the way optimize your spend

With this in mind, buying a set of impressions over a long period of time without running timely analysis is not a good idea. Instead, break up your spend and impressions into manageable time frames and give yourself enough space to optimize mid-campaign.

By tracking your $$ from impressions to conversions, in whatever form they may be, you’ll be much better equipped to pay the least amount of money to get the best people doing what you want them to do.

Tags: 

Add new comment

Filtered HTML

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <blockquote> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.