Online advertising metrics

Online advertising is based on a wide range of measurements, which are significantly different from traditional advertising metrics.

Metrics play a very important role in consumer advertising. They provide effective means to quantify advertising exposure to specific audiences. However, online advertising requires new approaches to developing marketing strategies and predicting results, which are very different from traditional advertising, for instance TV and radio ads. On the one hand, the metrics to which traditional media planners are accustomed are available online. Besides, calculating those metrics for a particular buy is actually quite simple. Unlike other media, every impression on the Internet is logged and reach numbers are commonly reported. On the other hand, it is much more difficult to find the necessary online data to predict advertising reach and frequency levels.

Traditional advertising metrics include three major measurements types: Audience Reach (the percentage of people within a specific universe who are exposed to a particular advertisement at least once within a given period of time), Gross Ratings Points (The Gross Impressions of a media buy divided by the population of the audience reached), Frequency (The number of times the company reached each individual who saw the advertisement), and Effective Reach (The number of individuals reached by the advertisement at a particular frequency, divided by the total number of people within a universe).

In online advertising, such measurements as Audience Reach, Gross Ratings Points and Effective Reach acquire new meaning. The calculation of Gross Ratings Points is based on the total impressions on a site divided by audience size. The percentage of users reached can be based off of the Internet Universe or total number of households. Aside from GRP, Target Ratings Points can also be calculated for a particular ad campaign. Target Ratings Points are estimated by multiplying the forecasted GRPs by the demographic composition of the site. Site demographic compositions can be obtained from website demographic data providers, such as Media Metrix, Nielsen/NetRatings, comScore, and @Plan.

Audience Reach metric measures the number of people who view the ad. In online advertising, the number of visits, unique visitors and page views for each website are easily summarized and reported. However, the major difficulty lies in predicting the accurate reach numbers, which are essential for developing efficient advertising or marketing campaign.

Measurements of effective reach allow the advertisers to calculate the percentage of users reached at a target frequency level or higher. This calculation provides data on how many users are having multiple interactions with the advertised product or service.

Typical online advertising measurements include Click-through rate (CTR), Conversion rate, Unique visitors numbers, Web site traffic data, etc. The marketer may use various online advertising payment models, including Pay per click (PPC, in which payment is based solely on qualifying click-throughs), Pay per lead (PPL, in which payment is based on qualifying leads), and Pay per sale (PPS, in which payment is based on qualifying sales). Most advertisers employ a combination of several payment models ("hybrid model").

Accurate online advertising metrics are critical for developing an efficient and predictable marketing strategy. On the other hand, to achieve more correct results, the measurements should be complemented by website demographic estimates and historical user-level frequency data, which are available from online data analysis providers.

How does KPI library work?

1. Find KPIs that you need - use search or browse appropriate categories.

2. Read description carefully to find out if these KPIs are what you need.

3. Download trial version for free to get an idea about what is inside.

4. Buy the full version to have KPIs in Excel with formulas and BSC file.

Ideas about KPIs

Subscribe to Balanced Scorecard ideas newsletter provided for free by authors of Strategy2Act. You will have 1-2 emails every week with balanced scorecard ideas and tips.


Software that will help you to manager your KPIS

Balanced Scorecard Designer (BSC Designer) is a tool that supports building a Balanced Scorecard system for a company, department or for a sole person. This program helps to build a Balanced Score Card system and provide business alignment.

BSC Designer helps to measure and control business performance using Scorecard and KPI tools.

Copyright 2000-2020 AKS-Labs. All rights reserved.