One of the most important things to do when building a business is set yourself up for success, but sometimes success is hard to define. Let’s talk about the two most important things you need in order to help you to define your achievements.
Most of the time retargeting is used as a performance media tactic. Two of the most commonly used KPIs to measure performance are Cost Per Acquisition (CPA) and Return On Investment (ROI). Normally a business that sells goods will use a ROI model and a business that sells services will use a CPA model. This can change under certain circumstances.
However, companies don’t always solely focus on ROI or CPA. Businesses that are more heavily focused on upper-funnel marketing will mainly have goals such as driving awareness, promoting in-store purchases, or increasing site traffic. These businesses may focus on KPIs such as increasing reach by maximizing the number of impressions or clicks, while minimizing their CPM (cost per 1,000 impressions) or CPCs (cost per click).
Sometimes it is difficult to choose only one KPI. Some businesses may want to drive a specific CPA, but also want to increase their reach by maximizing their impressions. In order to achieve this, you should create separate campaigns with specified budgets and a single KPI for each.
Now that you have chosen a KPI, we need to set the benchmark or goal. What number do you need to hit to be profitable?
If your KPI is CPA, then you will need to look into your books and find out how much you are willing to pay for a new customer. Start by asking yourself these questions:
Then determine what the retention rate is for customers that have engaged once and have become returning customers. These answers will help you determine your customer lifetime value. It is okay if your numbers are a little fuzzy here since you are using this number as a starting point.
If your KPI is ROI, things are simpler. You can usually start at $1.00 ROI, meaning when you spend a dollar, you also make a dollar in revenue. Anything above $1.00 ROI will be viewed as profit. If you have specific margins on the cost of your product then you may want to take that into account as well.
Now that you have defined a KPI for your business and a benchmark you want to hit, there are a few ways you can utilize Perfect Audience to see how we are hitting those KPIs and benchmarks.
Now that you’ve had a chance to check out our mobile benchmark report (download here!), it’s time to think about how to use this data to most effectively reach your audience. Best practices for mobile devices differ from those of desktops in a few important ways, so keep that in mind while crafting your strategy. Here are some tips to get you started:
With mobile adoption growing by the day across the globe, it has become critical for marketers to keep pace and leverage this consumer behavior. The potential gains are huge, and the market is only getting bigger.
Marin is proud to announce the release of our 2012 Q1 online advertising report. This report, which identifies significant year-over-year paid search trends, was compiled using data from over 1,500 advertisers and agencies who invest over $3.5 billion annually in online advertising through Marin.
At a glance, our study revealed an increase in click-through-rate (CTR), with cost-per-click (CPC) remained relatively steady. More specifically, we found a significant increase in CTR and a drop in CPC on Google. Some of our key findings include:
So what does all this mean? The increase in CTR coupled with a 12% lower CPC points to Marin users increasing their efficiency on Google. This finding is further validated by the increased usage of exact and phrase match type keywords, as users continue to identify and fill gaps using Marin’s keyword expansion tools.
Device targeting, specifically smart phones and tablets, continues to soar in popularity. Increases in click volume give evidence of the growth in consumer adoption. With smart phones and tablets showing higher CTRs and lower CPCs compared to desktops, mobile search should continue to be top of mind for advertisers.
Want to see other Q1 industry trends from 2012 with our recommendations? Download the full report here.
We just released our Q4 online advertising report, identifying important trends year over year in online advertising. We sampled the Marin Global Online Advertising Index, which includes over 1,000 advertisers and agencies that invest over $2.7 billion annually in online advertising.
Overall, our advertisers saw an increase in click-through-rate (CTR) and a decrease in cost-per-click (CPC). But more importantly, we found significant changes in clicks and impressions compared to the fourth quarter of 2010. Key findings include:
So, what does all this mean? The big jump in clicks and click through rates in the last year suggests that advertisers are continuing to increase investment in paid-search and consumers are even more engaged with paid search results.
Device targeting is also showing promise as smart phone and tablets become increasingly popular around the world. Based on the growing click share of smart phones and tablets, it seems evident that more and more people are conducting searches on these newer devices. And, these new devices are actually delivering solid performance for search marketers! The chart below compares CTR across devices in Q4 of 2011.
As this trend is growing rapidly, keep device targeting top of mind when planning your 2012 campaigns.
Want to see other Q4 industry trends from 2011 with our recommendations? Download the full report here.
(Note: You will be asked to fill out a short registration form to gain access to the full report.)
Today, Marin Software released the latest Paid Search Quarterly Benchmarking Report. The report analyzes data from more than 800 large-scale advertisers and agencies that collectively spend in excess of $2 billion annually on paid-search. From the report, we not only see year-over-year paid search spend is higher but advertisers also appear to be operating more efficiently.
Spend for our average advertiser in Q2 2011 is up 20% compared to Q2 2010. Click-through rates also increased by 12% while costs remained relatively flat. Things get interesting, though, when taking a closer look at what went on with Google. On a year-over-year basis the average advertiser on Google experienced a 15% drop in impressions, which by itself could be cause for panic. However, during the same period we saw an 8% increase in clicks. Essentially, consumers saw fewer ads but clicked on ads more.
So, either Google changed its algorithm for matching ads to queries (wouldn’t be the first time) or search marketers enacted measures to improve efficiency. During the last year, the share of paid clicks on Exact and Phrase match keywords increased 10%. Exact and Phrase keywords have higher click-through rates and lower costs compared to Broad match terms, leading us to suspect the drop in impressions accompanied by an increase in CTR and a flat CPC could be a result of traffic shaping and quality improvement initiatives. Would you agree? Have you noticed an increase in CTR over the last year by focusing more on Exact and Phrase keyword match types?
One question that’s often asked is whether energy prices impact ecommerce or other online transactions. While it’s a well-known fact that people drive less as gas prices go up, the impact of higher energy costs on online behavior isn’t well understood.
Does the squeeze of higher gas prices reduce online purchases, as consumers cut back on discretionary expenditures? Or alternatively, do cash-strapped consumers buy more online, as they shift spend away from activities that require driving.
In a recent study, we looked at the impact of energy prices on consumer behavior. Our findings indicate that higher energy prices likely change online behavior and could be good news for Google.
For more information on this subject, as well as, specific insights about your industry, download our Q1 2011 Paid Search Research Brief.