You Ask, I Answer: Ad Value Equivalence and PPC Ads?

Alessandra asks, “The customer is getting leads organically in the same number as before the start of the ads campaign, so the few conversions (1 month running) makes him think it’s not worthwhile to advertise. My thoughts are going in the direction of explaining the value of impressions on their own, the values of clicks to measure interest in offer, even though conversions are still few. I do not think he should compare organic with ppc, but ppc cost vs other advertising channels, like radio and newspaper ads, which would cost much more and have unmeasurable results. Am I going in the right direction? ”

What you’re proposing is ad value equivalence, demonstrating the effectiveness of an ad based on its cost comparison to other ad channels. The challenge with the example above is that you don’t have equivalent measures. If you could demonstrate a cost per visitor for TV and/or radio, then you could make a logical case for one channel over another. Unfortunately, those other channels don’t have good numbers out of the box without added tracking, like custom URLs.

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In today’s episode, which is a follow on to a previous question, Alessandra asks, the customer is getting leads, this is about trying to determine the impact of advertising.

The customers getting leads organically in the same number as before the start of the ads campaign, so the few conversions make him think it’s not worthwhile to advertise.

In terms of persuading him, my thoughts are going in the direction of explaining the value of impressions on their own the value of clicks to measure the interest in the offer, even though conversions are still few.

I do not think he should compare organic with PVC but PPC cost versus other advertising channels like radio and newspaper ads which cost much more and have unmeasurable results Am I going in the right direction? you’re proposing what is known as ad value equivalence and that is when you are saying We’re getting the same result from this technique that we got from this other technique, a different cost and a presumably a better cost.

And that’s an okay thing to do as long as it’s an actual apples to apples comparison.

A lot of people try to do that with non similar channels.

You know, the classic example is trying to measure public relations by advertising via they’re very different creatures.

And they’re not comparable.

In the case of taking one ad channel versus another.

We have existing measures for that, like return on adspend return on adspend is you know, earned divided by spent.

The challenge in this particular example is that earned divided by spent requires you to have gotten some earned in order to to make that determination.

When you’re comparing ad channels themselves.

You can compare some of the results on things like cost per visitor to the website, but it requires you to have have really good tracking.

And this is a place where a lot of companies really fall down.

They will run an ad say on on TV or in a newspaper.

And they won’t do any kind of intelligent tracking of it.

So if you were to advertise on our terrestrial radio station, you’d want to have a custom URL you know, something like you know, your company comm slash radio, so that people know where to go and in the fashions easy to remember, and then you can track that traffic that you know your company comm slash radio generates and attributed correctly to the radio channel.

The same is true of television.

The same is true of newspapers, newspapers a little easier because you can make the URL visible as opposed to purely audible.

But companies don’t do that.

And if you don’t have that level of tracking, you can’t do an apples to apples comparison.

impressions mean nothing They are a diagnostic in the sense that you want more rather than less.

And if it’s zero, you know something’s broken.

But beyond that they’re not a great measure.

Because the definition of an impression changes so much.

You buy a billboard ad on the side of the road.

The billboard advertiser will tell you how many cars go by that Billboard.

That’s their definition of impressions.

Compare that to a Facebook ad where Facebook ad may not register an impression until it has been on screen for and rendered for a certain amount of time.

They’re very different numbers, and so they’re not a good apples to apples comparison.

The first touch point in your marketing operations funnel where you would have an apples to apples comparison would be website visitors, because if you can get people to visit the website from an ad, from a pay per click ad from An email from whatever, you’re now you now have the same system of measurement for that outcome regardless of where it came from, whether it came from an ad, whether it came from a social media post, that person still showed up on the website, and that is still a trackable event and it is the same trackable event across those different channel inputs.

So that’s where, if you’re going to use a measurement, you have to use something that has a common measurement across all the different channels.

So that’s going to be gonna be the website, even clicks.

You would think clicks on an ad would be something comparable, but it really isn’t because there are some clicks that are worth more than others in email marketing.

You will notice that in your newsletters, especially if you’re b2b.

You will get a way more clicks than unique clicks on a newsletter.

Why Because if you’re sending stuff to corporate addresses, there’s a firewall behind the scenes, it’s clicking on every link to make sure that doesn’t go to a malware site and potentially infect their users.

So your newsletter will show up as having hundreds of clicks.

And every link gets clicked in the newsletter and you’re like, Wow, my newsletter is really popular, but you’re looking at the results going, but nobody’s buying anything.

Why? Well, there’s automation behind the scenes that’s screwing up those results.

But what typically happens is that those servers will do a fetch of you know, the, the header of the page or wherever it is, it goes in, you will will not go much further than that.

So there’s a case where your website visitor numbers are still probably be okay.

So, in this example, if you can compare similar channels, with an identical metric, then yes, you can use the methodology that you described.

The reality is If you don’t have some kind of ultimate sale, you’re probably not going to be able to show some good results, and an alternate sale the one, this is something that people can do when they’re not ready to buy.

And easiest thing, for example, subscribe to an email newsletter, right? That’s an action that you can take that has value that can demonstrate value.

But nobody has to swipe the credit card to do that, particularly if it’s a complex product.

And that’s something that I would say, if you’re not able to show hard dollar conversions right away, because maybe the sales cycle is, however long.

If it’s 90 days, then obviously the ad campaigns and up and running for more than a month, you’re not going to see any results right? That’s a key question to ask the customer if you don’t know what is the length of your sales cycle.

If you’re not getting the conversions you’re looking for, where’s the length of the conversion cycle.

A good marketing automation system will tell you this is how long Between first touch and, you know, lead generation that it takes to do that for your company.

And again, if the ad campaign is not inside that window, you’re not gonna be able to show any results.

So that’s really important to look at what you’re tracking how you’re tracking it, and offer an alternate sales so that you do have something to track that you can say like this put X number of subscribers and then whatever your newsletter subscription rate is for converting users, you will eventually reap that value.

Assuming that you’re attracting the right kind of audience is a challenging situation, because at the end of the day, the conversion actually is what you’re being measured on.

And so if the ads are, are not driving conversions, ultimately, that program will not go forward because you can redeploy those resources elsewhere.

Now, whether it’s more efficient than radio or newspaper, we’d have to measure that and I would encourage you to Encourage your customer to be measuring all the different ways they’re spending money.

And so they can make an informed judgment on, you know, either return on adspend or similar performance on adspend.

with things like website traffic, it’s a good question.

It’s a challenging situation.

If you have follow up questions, leave them in the comments box below.

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