Imperfection of KPIs in the ad space

Do you remember the last time you were introduced to a new key performance indicator (KPI) to measure the impact of your digital investment … not so long ago right?

It’s funny to notice how fast these new KPIs appear, and how fast the ones we had used seem obsolete.

In our beautiful world of display ads, it first started with the number of impressions and click-through rate (CTR). Although we still track these, we have quickly discovered that impressions are a false friend of viewability and that CTR did not really encompass 92 percent of our prospects (8 percent of Internet users account for 85 percent of clicks – ComScore) …

We then switched from served impressions to valuing viewable and added post view impact to CTR. Our digital world was safe again. Kind of.

This has led us to better track and measure user engagement on our website and beyond, starting with social networks. Speaking of social impact, did you know about Dark social which is poorly tracked and has been reported to be responsible for up to 60 percent of overall referral traffic for various websites? Interesting, isn’t it?

We are now in a position to measure the return on ad spend (ROAS). The Holy Grail? Again, it does not include the campaign halo effect on the product ranking in search engines or its impact on offline sales for instance. And this is a pity when you consider that more than two-thirds of digital shoppers are influenced by what is online before buying offline – ROPO (research online, purchase offline).

I am often asked “what is a good ROAS”? Or “let’s target a ROAS of 2”. Actually, this metric did not exist before and there is no such thing as bad or good ROAS.

So what’s the point? Data is key but analytic is king. We sometimes focus too much on numbers, and forget that they are just a step in the digital journey, not an end.

The key is to optimize hand-picked KPIs from one campaign to another, understanding what could be better done because that is where their interest lies – which background color is the best for the ad? Which message had the best impact? What shopper groups could we add?

KPIs are imperfect. Increasing KPIs at all costs through impressions, CTR, etc. and botching the creative part are amongst the main reasons why ad blockers arise. The good news is that this “advertising threat” acts as an eye opener and is an opportunity for a better tomorrow.

Editor’s side note: Perhaps the Scottish proverb applies here, “You don’t make sheep fatter by weighing them.”