How to measure the performance of paid social

It’s essential for digital marketers to be able to prove the value and return on investment of paid social.

Whether it’s a client or a board member you need to convince, there is plenty of information through the various platforms to help us demonstrate the effectiveness of social media ad campaigns. You’ll find more information showing what success looks like in this blog about proving the value of social media advertising.

Where traditional social media metrics focused purely on clicks and engagements, the level of sophistication in social media metrics now means we can get a comprehensive understanding of the entire consumer journey, from awareness to conversions and, ultimately, ROI.

Let’s look at some of the key metrics to consider when measuring the performance of paid media campaigns.

Buying metrics for paid social

Buying metrics are the cost of displaying your ads on a platform and will often be how you are billed. These vary depending on the popularity and competitiveness of the audience you are trying to reach, and where you want to reach them.

For example, it may be more expensive to reach an audience on LinkedIn than Twitter, because they may be more inclined to respond on LinkedIn. Additionally if it is a competitive landscape and you are trying to reach a small number of people, the price will be high (for example, C-suite executives on LinkedIn).

Buying metrics are determined on a real-time bidding auction basis (RTB) with the automated auction taking place when the inventory becomes available (e.g. a user opens their news feed) and the winner is determined by their bid.

CPM: Cost per thousand impressions

The various social platforms limit the ad inventory available so as not to compromise user-experience and so CPM is a form of bidding for ad real-estate on the social platforms; the cost will depend on factors such as time, audience and location.

The CPM metric relates to the cost per unique display or view of your ad which is great if you’re looking to increase awareness. You’re paying only for reach and getting your ad in front of as many eyes as possible.

CPM doesn’t take into account the performance of that ad – the actions users take, or don’t take, once they’ve seen it – but it is a way to gauge exposure of your paid media and how much it has cost you to deliver an ad.

Response metrics

Response metrics determine how your audience responds to your content and shows the receptiveness of your audience to the content, brand or product you’re promoting.

CTR: Click through rate

CTR shows how people are actually engaging with your content once you’ve served it. This is the total number of users who click on your ad divided by the total number of times that ad is served. Obviously, the higher the CTR the better, as this shows that your ad is engaging and your audience is hooked.

Response metrics are key to judging how effective your ad is in terms of targeting and if people are enjoying and responding to the content.

VTR: View through rate

VTR is the percentage of people who watched an ad all the way through, out of all the people who had the ad load on their computer. It is usually used for video ads.

Within social channels strong performance in these metrics will lower your CPM as each platform ultimately wants to display content that its users enjoy and engage with and will in turn reward this with a lower buying cost.

Relevancy score

The social media platforms assign a score to your ad units based on how relevant they are to your audience based on how people are responding.

This is determined by factors such as interactions (likes, comments and shares in the case of Facebook), how much time users spent looking at your content compared to the average time they spend looking at other posts, etc.

Relevancy score is a good indication of how well your content will perform against your objective.

Performance metrics

Strong buying and response metrics lead to good performance metrics. This is because you are paying less for the ad buy and more people are responding.

CPC: Cost per click

Once your CTR is established, your CPC can be analysed. If you have a high click to impression ratio you’ll get a better cost per click and therefore your impressions will be cheap.

Quite simply, CPC is the price you pay each time someone actually clicks on your ad. It’s an effective way to drive traffic into your sales funnel and, providing that funnel is strong, it should provide you with quality leads.

If those clicks don’t convert to enquiries and sales, it may be that you need to work on the user journey once someone has clicked through to your ad.

CPV: Cost per view

CPV is the price paid when a video ad is played. In general the video doesn’t have to be watched the whole way through to cause a pay out.

Conversions

Ultimately, what we want is conversion, whether that be a purchase, a download or a visit to a landing page. By setting up tracking pixels on your website, you will be able to track the user-journey from the social media platforms to your site.

When working on lead generation it’s critical to consider what a lead is worth to your company. This will then determine the ad spend you put behind any given campaign.

Audience growth rate

Another key metric to consider is your audience size. Have you seen an increase in your online followers since running your ads? If so, it’s a sign that your content is resonating with them.

Alongside this, consider engagement with individual posts and look at how many likes and comments they’ve received.

Being clear about your objective

It’s imperative to set KPIs. What are you trying to achieve and what metrics will you look at to compare success? Focus on the metrics KPIs that are most relevant to the platforms your brand is active on and that have the most relevance to your audience’s behaviour.

Of course, the metrics you prioritise will all depend on what your goals are and it’s important too to bear in mind that each platform has slightly different ways of calculating metrics.

What’s next?

Huge advancements in social media advertising mean we now have better insights so that we can drive better performance with campaign adjustments.

Mighty Social can help you make your ads even more cost-effective with our new audience builder technology the Atom, which gets the best creative in front of the most responsive audience. Contact us today to get started.