The digital media landscape is littered with acronyms – CPM, CPC, PPC, ROAS, ROI – each fostering heated debate, and together clouding the core problems we’re trying to solve. All are meant to help us measure performance, but are we measuring the right things? It’s time to cut through the debate around clicks, views, actions and impressions, and focus on the one question marketers should be asking around performance, Did this marketing action result in a consumer purchase?
Focusing on the ultimate objectives – more sales and higher revenues – helps marketers move beyond the acronym wars. Does it matter how many impressions you serve if the consumer being served does not turn into a customer? Does it matter how many times someone clicks on an ad if they never make a purchase? The only metric that means anything is how much it costs a retailer to acquire a customer.
Using the cost per acquisition (CPA) metric does not suggest that it’s your only pricing option. If your business prefers to pay on a CPM or CPC basis, by all means go for it. But make certain that you do a direct translation into the CPA to stay on track and ensure an apples-to-apples comparison of your media providers. Once you commit to this consistent way of measuring, you can focus on the stuff that really does matter for effective display advertising:
Today’s consumers have become numb to the endless stream of generic, irrelevant, ill-timed advertisements, and it’s up to marketers to get smarter and cut through the monotony. Impressions versus clicks? They both mean nothing if you’re not generating revenue. Instead of throwing ads out there and seeing what sticks, be more calculated with your approach and increase the performance of the metric that counts: your cost per acquisition.