COST PER THOUSAND IMPRESSIONS (CPMS)
The Cost Per Thousand Impressions (CPM) is used to indicate the price of 1,000 advertisement impressions. This metric helps measure performance against cost. In traditional advertising buying your CPM is a set cost. You will pay X amount of dollars for 1,000 impressions. In Facebook advertising your CPM can fluctuate based on two major factors; how easy it is to reach a user in your target audience and the number of competing campaigns trying to reach the same target audience as you.
For instance, sometimes you will see huge fluctuations in CPM’s around large shopping events like Cyber Monday and major holidays. In NYTRI’s case, the New York City Duathlon (NYCDU) race was held on Labor Day Weekend. This presented an interesting problem as not only was the CPM being driven up due to the increase in overall advertisements, any native Ny’er will tell you….people tend to leave the city on Labor Day for one last day at the beach before Winter sets in. This means we needed to cast a larger net with a higher number of impressions for this event. The total advertising spend for this particular event was twice as much than the other races, which did not fall on a major holiday weekend. Even with these challenges, we were still able to gain a 25% increase in attendance over prior years.
COST PER CLICK (CPC)
The Cost Per Click (CPC) is another metric for tracking value and effectiveness of a campaign. It represents the cost to the advertiser every time someone clicks on their ad. Cost per clicks can vary greatly due to a variety of factors including the platform on which you’re advertising, the type of advertising used, the target audience, the product or service being promoted, and the bidding strategy. One way to ensure the best CPC for an ad is to conduct an A/B test, as we did with NYTRI. By moderating and adjusting our ads throughout the three month time period, we were able to ensure we were running advertisements at the lowest CPC possible.
CLICK THROUGH RATE (CTR)
The Click Through Rate (CTR) is a great indicator of how well an ad is resonating with an audience. It is the actual number of clicks that an ad received per the number of times the ad was viewed. This is an excellent metric when you are looking to drive conversions or create leads. The CTR rate can be used to determine if the ad’s creative and content are resonating with an audience who may be already fatigued by the numerous number of paid posts they see in any given day. A higher CTR shows a well-performing ad.