Science Of Marketing®
CTR, CPM, CPC, CPA insights!
Home » CTR, CPM, CPC, CPA insights!
Kuware-Avi-CTR-CPM-CPC-CPA

CTR, CPM, CPC, CPA insights!

Full transcript:

So you’re selling online!
Requirement: that you are selling online.
Then watch this video, because I want to tell you a few things which people get confused on. It’ll help you sell more.
If you’re not selling online or just starting out. This is not going to be very helpful to you.
So let’s start.
So first metric, which I want to talk about is click through rate (CTR).
So what is CTR? Click through rate is at what percentage of people who actually have shown your ad actually click through it. So the problem with this metric are not necessarily the problem, the area where people get confused with click through rate is, if the click through rate is low they decide working on their landing page on a website.
But just think about it…
They have not clicked through, which means it doesn’t matter how much you improve your website, they don’t know what your website looks like.
So click through rate is a metric, which is a function of your ad, your ad copy. It is nothing to do with your website or wherever the landing pages. So if you want to click through rate to be higher, which means they are not engaging with your ad, you need to work on the copy, just work on the copy. So that’s a take away. CTR is lower work on the copy, work on the offer. What you are saying there on the ad itself is what is deciding CTR.
The other metric is (Cost per Mille) CPM.
It’s nothing to do with million. It’s actually cost per thousand impressions. What are impressions? where your Ad is shown by Facebook or Google or youtube? That is the impression.  An opportunity for somebody to look at that ad and interact with is an impression. So CPM, CPM is other metric. People get all worked up on.
CPM is a function of your competition.
Who else is competing for the same audience and seasonality? Basically also because some season, depending on around thanksgiving, everybody’s putting ads out. So CPM will go high. So my take away there is don’t focus too much on CPM. It is what it is. It’s not costing the your cost is just because of the competition. So there’s not much you can do about CPM.
Let’s go to the next metric. Cost per click (CPC).
Now Cost per click is a little bit more complex metric because it’s a function of multiple things. It does include the copy. How good is your copy? Because basically, if your copy is good and Facebook has to show your ad to less people before they click, then your cost per click will be lower because it doesn’t matter how you’re paying. All ad platforms, end of the day, internally are charging you for CPM, which means how many times they have to display ad.
So one thing to improve is, your ad. It will probably increase and improve your cost per click. The other is actually your landing page as it will matter because all platforms like users to after clicking, have a good experience. So if your ad copy said something else, but when they end up on the page, it is completely unrelated or if you have a wrong link, they will leave immediately and none of the advertisers platforms like that because it’s a bad experience, which means people will not click enough on their ads and they don’t want that.
They want you to make a promise in your ad and fulfill that promise or go on and details of that promise for that.
So which means you won’t be penalized a bit if your copy on the landing page is not matching video ad. So to reduce to improve your cost per click, do work on your copy also of not only that, but also the learning on landing page.
Now the most important metric, if you’re selling online, is cost per acquisition (CPA).
So the decision could be what is an acquisition, in most cases. If you’re selling, then somebody buys your product, cost per acquisition (CPA) is something that you want to watch very, very carefully. And because that will determine what is your return on our spend. And that will be our other video. We talk about ROAS because ROAS is in itself an important, very important metric and it’s misunderstood. And I’m just kind of giving it away. But we don’t like ROAS. We prefer the other metric, which you cannot directly measure. But can be computed. We’ll talk about that. But today, let’s talk about cost per acquisition and finish that cost per acquisition metric cost per acquisition.
The one of the aspect of acquisition is what is an acquisition and when?
A user clicked and then they went on to buy the product that’s acquisition, but what if they clicked yesterday or the day before yesterday or the last month. And then they bought? Is that still attributed to that acquisition? That’s when the attribution model comes in.
So attribution model is basically the concept that when they click, for this conversion to happen which ad did they see? what was the window in which if they clicked and they still converted later? should it be attributed to what?
Now, the attribution model has something very interesting, you need to consider. It does not matter which platform, what attribution model you are using. If you are trying to optimize your ROAS, you want to optimize that for shortest possible application window. And when, I say this again, optimize all your return on ad spending for the shortest attribution window, but calculate your return on the longest attribution window.
The idea is this…
You cannot wait because attribution window for it is long 30 days. You cannot wait for 30 days. And that information is already passed. The return, the conversion, which is happening for something which was clicked 30 days ago. There’s only so much you can do about it. So you’ve got to look at shorter window of 24 hours and how they’re interacting based on that change.
Your Ad spend should be decided on a shorter window, but actual calculation of your ROAS should be done on the longer window.
Why? because that was return on your ad.
You ran an Ad and 14 days later, somebody came and bought that. It  should be attributed to the Ad.
They’re done on your ads return should be calculated for the longest window, but the optimization should be done on the shortest window. So that is the takeaway.

Conclusion:

So click rate important. You know, just to summarize, important, but focus on that.
CPM? Just don’t worry too much about it, except if you feel that it’s very high because of seasonality, maybe you don’t want to do ads that time.
CPC? Is a function of your ad and the landing page
CPA? Keep average attribution window in mind that the customer acquisition is based on attribution window.

I will do a little video on attribution window because it’s a complex enough set the subject, which deserves its own video.

All right. And as I’ve said before, there is no cause to sign up. We don’t charge for any calls. The only reason I’m giving this information away. This is what we do for our clients. Hopefully you’ll find it useful and use it for your own business. And if you feel you need help with these ads and you need help with selling online more, you can reach out to us, and we’ll be happy to help you with that. That’s a selfish motive. Give away the information of how we work. And you can benefit. And if you feel overwhelmed and need help, reach out to us.
Thank you.
And follow. Subscribe to get more content like this.
Share

Leave a comment


Share