ROI Acts As Better KPI Than CTR,CPC! DOs And DONTs For Advertisers [REPORT]

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With the advent of the fast emerging digital advertising technology, a majority of advertisers and marketers around the world are aware of various marketing techniques via social media sites and are well versed with key performance indicators for their Ad-campaigns. Facebook’s (NASDAQ:FB) strategic Preferred Marketing Developer Nanigans, recently released an extensive report about ad performance so far this year, on the social network.

Lifetime ROI Dominates Proxy Metrics

Advertisers generally look for higher CTR for an Ad compared to total number of impressions, but graph below depicts an entirely different story. Higher CTR does not guarantee higher profit margins. When we compare gender specific Ad-campaigns on Facebook during first 3 quarters of 2013, male users registered 15% higher CTR rate compared to female users whereas male user specific Ad-campaign derived 26% lower ROI when compared to the female group.

Activities, discussions and engagement by female users are generally centered around various shopping brands and their diversified products. Usually, men like to get into the store, get what they need and get out fast. Whereas the women groups generally browse online looking for a single item and end up buying more items than required thanks to lucrative offers and schemes. Advertisers should focus on gender based Ad-campaigns depending on its products type. In general, it is always better to opt for female users as target audience for promoting particular product backed by heavy kickbacks and offers.male vs female users CTR ROI graph

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Similarly, the CPC for the male audience averaged 9% lower than the female audience while the male audiences averaged 28% lower on RPC (Revenue per click) than the female audience in first 3 quarters of 2013.

RPC vs CPC, Female vs Male

Above stats clearly signify that women totally outplay men when it comes to conversion of a potential Ad viewer into a customer. It is advisable to put a large chunk of your investment on a female audience compared to men. Introducing exciting offers and services can help grab the attention of female users.

Higher Age Group Audience Record Double The ROI Than Lower Age Group

Generally lower age group people are more conscious about the price tag and various other additional offers along with the product. Whenever  teenagers look for a particular product, they end up browsing numerous websites in search of the best the deal in terms of offers, discount, service and add-ons. On the other hand, for people in the higher age group the loyalty factor comes into play. Adults prefer to use the same brand which has served them well in the past.

ROI vs CTR based on age group

In the above graph, the lower age group users have recorded more CTR than higher age group as they end up clicking majority of Ads looking for best options. Whereas the higher age group hardly ever bothers to check out the latest Ads and sticks to the concept of Old is Gold.

RPC vs CPC based on age groupA similar trend was observed when CPC and RPC were compared between different age groups. While the lower age group users recorded lower CPC , the ROI was also significantly lower than higher age group audience. It is important for marketers to provide the best offers and services to their users thereby establishing a loyalty factor for their brand amongst its consumers. Very few online shops and brands care about users after they buy the item, as a result users prefer to switch the brand during next purchase. Final verdict in this regard would be to provide the best options and offers along with long-term service for the product.

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KPIs By Days Of Week Too Shifted Marginally From Their Usual Proxy Metrics

While examining KPIs by day of week, ROI wasn’t so predictive when compared to the usual Ad performance metrics. Although, retailers averaged the lowest CTRs on Mondays and Tuesdays, ROI was marginally higher on those 2 days. revenue vs CTR days of week

The above graph could be also be indicative that the that majority of Online dwellers are a working group and they prefer utilizing weekends for shortlisting their favorites from the online stores and push the shopping or payment part, during the beginning of the week. As the weekend comes closer a majority of people start looking at various Ads thereby recording a higher CTR during the week closure and they prefer payment transactions to happen on weekdays as it is easy to track in case they have any issues with online payment made.

DOs And DONTs For Advertisers And Marketers

It is important for advertisers to assimilate the trending KPIs for their Ad-campaigns and judge its success based on revenue generated rather than CTR or CPC. Depending on the group of people who would find their product useful, (gender wise and age group wise) Ad-campaigns must be launched. Even if investment is more for a particularly specialized Ad-campaign advertisers should go ahead with it if the predictive ROI is remarkably higher.For example the Ad-campaigns for female groups might need higher investment but it will definitely generate more ROI. Similarly advertisers should take care of the timing of the release of their offers along with new product launches, as most online users prefer checking Ad-updates during closure of the week.

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