The biggest challenge with self-serve advertising is how you know if what you’re doing is working.
An ad campaign’s success isn’t just measured by the outcome. It’s also measured by the key performance indicators (KPIs) that grant publishers and advertisers insight into how online consumers behave, how and where they click on ads, and how much bang you’re getting for your buck.
This is the most streamlined, cost-efficient path to the ultimate goal: increased ad revenue for everyone.
This article will help you learn more about KPIs and self-serve advertising in general. It will also guide you on the most essential KPIs to track and how to interpret the data they represent.
Understanding Self-Serve Advertising
Self-serve advertising is a form of digital marketing in which advertisers work directly with a publisher to create, manage, and serve targeted ad campaigns on their website.
Traditionally, advertisers who wanted to serve ads on a website would work out an expensive contract with the publisher, using a salesperson as a middleman. Self-serve advertising cuts out the salesperson, resulting in major advantages for the other two parties.
A self-serve advertising platform for publishers is a system that allows them to offer advertising space directly to advertisers without intermediaries like sales teams or external agencies. Publishers can manage their ad inventory, set pricing, and control which ads appear on their sites or platforms.
Examples of such platforms are Google Ads (for advertisers) and Setupad Prebid Self-Serve (for publishers).
Benefits for publishers and advertisers
The following are benefits that both publishers and advertisers receive from self-service advertising.
- Advertisers get more access to ad space at a lower price, and publishers also get a bigger cut of the ad profits.
- Publishers can attract more advertisers to their sites, thus increasing their ad revenue.
- Advertisers have more control over their ad campaigns.
- Advertisers have more flexibility and can adjust their ad campaigns to succeed.
Importance of Tracking KPIs
Publishers and advertisers need to track KPIs to reap the above benefits. In this section, we’ll explain those and their impact on ad effectiveness.
Why KPIs matter in self-serve advertising
Key performance indicators, or KPIs, are vital to the success of a self-serve advertising campaign. These data points show advertisers how their campaign performs and guide them in changing their ad creatives to achieve their desired outcomes.
KPIs are also important to publishers who offer self-service ad platforms. They tell the publisher where they can increase visitors’ interactions with ads to drive ad revenue.
How KPIs influence ad effectiveness and revenue
KPIs have a surprising amount of influence over ad effectiveness and revenue.
For example, the conversion rate and return on ad spend (ROAS) indicate how well an ad works on consumers and how much revenue it generates. If both the conversion rate and the ROAS of an ad are high, a large percentage of the people who click on it will also purchase the product it’s promoting.
However, the ad campaign strategy must be adjusted if one or neither is high.
Essential KPIs for Publishers
Now, look at the essential KPIs publishers should track to optimize their website’s ad revenue.
Impressions
An impression occurs when an ad fully loads onto a webpage or app. It’s also recorded whether the visitor clicks on the ad or not. As such, this KPI offers insight into how well certain ads are loading and is also an important component of other KPIs, as you’ll soon see.
Click-Through Rate (CTR)
The click-through rate (CTR) is the rate of people who click an ad when they see it online. The formula to calculate it is simple:
Number of clicks / Number of impressions = CTR
According to WebFX, the average CTR for display ads (that is, ads served on websites and apps) is 0.46%. Therefore, you should reach 0.46% at least or, preferably, exceed that number to keep up with your competitors and maximize conversions.
Cost Per Click (CPC)
The cost per click (CPC) measures the money the advertiser pays the publisher when someone clicks on their ad. Tracking this KPI helps the publisher measure their ad revenue and determine whether to increase or decrease the CPC to maximize profits.
Conversion Rate
Conversion rate measures the number of people who perform a desired action, such as purchasing a product, after they click on a specific ad. The formula for it is:
Total number of actions performed / total number of corresponding ad interactions = Conversion rate
This helps publishers see how effective an ad is at getting people to click on it and perform a revenue-generating action that benefits both them and the advertisers.
Return on Ad Spend (ROAS)
As we mentioned earlier, return on ad spend (ROAS) indicates how much revenue an ad campaign earned compared to the amount spent.
For example, if you spent $50 on an ad and it generated $100 in revenue, you would calculate:
($100 (ad campaign revenue) / $50 (ad campaign cost)) x 100 = 200% ROAS
200% is a really good return! However, anything lower than 100% means the campaign fails and needs tweaking.
Revenue Per Thousand Impressions (RPM)
Revenue per thousand impressions (RPM) shows how much revenue is earned per 1000 impressions of an ad. As always, the higher this number is, the better for both the publisher and the advertiser.
To calculate RPM, here’s the formula you would use:
(Estimated ad earnings / Number of ad impressions) x 1000 = RPM
If you earned $100 from an ad and got 2000 ad impressions, the result would be $50.
Viewability Rate
Just because an ad loads doesn’t mean users are looking at it. According to the Media Rating Council (MRC), a display ad has been viewed if at least 50% of its pixels are viewable on a screen for at least one second.
You want to make sure you’re getting as many views as possible. You can do this by calculating your viewability rate as follows:
(Total number of views of an ad / total number of ad impressions) x 100 = Viewability rate
Engagement Metrics
Other KPIs to track are engagement metrics for your website. These show how many people are visiting your site and interacting with it. They include:
- Number of visitors
- Bounce rate (i.e., the rate of how many people leave your website after viewing only one page)
- Likes, comments, and shares
- Video views
Tools and Platforms for Tracking KPIs
Leveraging the right tools and platforms is crucial for effectively monitoring and analyzing the performance of self-serve advertising campaigns.
Many digital marketing tools offer comprehensive dashboards that integrate various KPIs into one view, making it easier for publishers and advertisers to track and optimize their campaigns.
Google Analytics stands out for its ability to comprehensively track website traffic and ad engagement.
Platforms like AdRoll or Criteo provide detailed insights into impressions, CTR, and conversion rates for real-time bidding and ad performance analysis.
Additionally, specialized tools like SEMrush or Ahrefs can help understand search-related KPIs that indirectly impact ad performance, such as keyword rankings and site visibility.
Conclusion
Understanding and tracking the right KPIs in self-serve advertising enhances the effectiveness of ad campaigns and maximizes revenue for publishers and advertisers alike.
By identifying crucial metrics like impressions, CTR, CPC, conversion rate, ROAS, RPM, and viewability rate, stakeholders can make informed decisions to refine their strategies.
Moreover, using advanced tools and platforms for monitoring these KPIs enables a deeper dive into data analytics, ensuring that every ad dollar spent is an investment toward higher profitability and better consumer engagement.
As the digital advertising landscape evolves, staying vigilant in KPI tracking will remain key to navigating the complexities of online marketing and securing a competitive edge.
BIO:
Alise is a content marketing manager at Setupad. Having worked in the adtech industry for more than three years, Alise has developed a strong attention to detail and research, as well as a passion for technology.
Her work with content is aimed at helping publishers scale their businesses through powerful digital marketing strategies. Alise believes in the supremacy of holistic website optimization for incremental revenue gains.
