What Agencies Are Too Scared To Tell You, But We Will
April 13, 2016
Agencies have long managed the majority of the top brands’ advertising dollars, but that’s now changing fast. Traditional agencies favor tried and true campaign formulas and traditional metrics of “success”. However, in today’s digital world the Facebook KPIs of yesteryear such as cost per click (CPC), click through rate (CTR), and even cost per acquisition (CPA) are actually holding your campaigns back and lowering your return on investment (ROI).
Targeting the most impactful KPIs means adjusting a campaign’s strategy, more deeply understanding your partner’s business, and redefining what “good” and “bad” indicators are on a case by case basis. According to Digiday’s Confessions series, Senior Publisher Execs feel that top agencies tend to back away from such re-alignment conversations because they are “hitting goals” when in reality, the campaigns and businesses of their top brands are suffering.
How Ampush Is Different
Here at Ampush, we are in the business of driving performance aligned with our partners’ goals, whether it’s revenue, user acquisition, or business growth. We don’t waste time or money improving metrics that don’t impact the bottom line. To make the most of our partners’ advertising dollars, we focus on the performance metrics that impact their revenue and business growth the most: return on ad spend (ROAS) and lifetime value (LTV).
How CTR and CPA Hold You Back
Sure CTR lets you know that you’re connecting with the right audience in terms of basic interest, and CPA tells you how much you’ve paid for a given customer, but they don’t accurately reflect intent and actual value. You can drive cheap traffic to your website or app via a branding campaign optimizing for impressions, or you can acquire cheap new users by broadcasting generic messaging across broad audiences, but these don’t always translate into measurable impact for your business. The bottom line is that if long-term results are what you’re after, CTR and CPA don’t tell you much about the effectiveness of your ad or offer. All clicks and acquisitions are not equal.
LTV and ROAS Mean Results
To really hone in on getting the strongest ROI, the campaigns we manage for our partners aim to target audiences that are most similar to their best customers or most valuable converters. Ampush analysts don’t target based on interest, but instead on intent to take action, and the projected value of that action. In other words, we don’t want just anyone interacting with our partners’ ads, only the right people. This method helps ensure a stronger return on ad spend, because we target those most likely to significantly impact your bottom line. While this may result in a low CTR, we’re ok with that as long as ROAS and LTV are high. These Facebook KPIs actually power performance and revenue.
In situations when our partners’ business models favor bulk customer acquisition over strict LTV guidelines, we focus our targeting on the highest value users first and tier our bidding strategies based on incremental users. This means that if volume demands acquiring lower value users, we’ll pay less for them!
We apply this methodology to branding campaigns as well. While the initial campaign objective of a branding campaign may be CPM and awareness, we connect branding campaigns to Direct Response campaigns as a natural next step along the customer journey. Doing this both informs the target audience of the branding campaign and can make the performance campaign more cost efficient.
Bonus: How We Do This
Orienting a campaign to the superior Facebook KPIs of LTV and CPA (including an individual ad’s performance) requires off-platform and down funnel tracking. We typically drop a pixel on a lead that completes the process to separate out our goal-acquisition from the rest. For LTV, we upload CRM lists from our partners to create tiers or categories of ideal customers. From this we build lookalike audiences to go after platform users most similar to these valuable customers.
If you’re interested in learning more about what we do for our partners to focus their campaigns on metrics that matter most to performance, leave us a note or contact salesteam@Ampush.com