Expert Q&A: Are Display Ads Worth It?
According to Unbounce, 98 percent of paid ads are a waste of money. Unbounce claims this is because companies are doing their display ad marketing wrong, but at Cybba we know that users who are retargeted to are 70 percent more likely to convert, prospecting campaigns can bring a 330 percent increase in impressions, and Pay-Per-Click (PPC) ads can have a 5 percent click to conversion rate.
We asked Jack Politis from our Ads team about how experts measure the success of display ads. Then we got his advice on optimizing display ad campaigns and picking the best management agency for your business. For additional tips on setting up your display ads, schedule a free consultation with our Account team.
Q: What Key Performance Indicators (KPIs) do companies use to measure the success of display ads? How are they calculated?
JP: The KPIs depend on the goal of the campaign. For a retargeting campaign, where your ads are aimed at recapturing traffic that previously visited your site, Return On Ad Spend (ROAS) and Return On Investment (ROI) are the main metrics. These are ratios of how much you made off the ad divided by how much you spent. You can also look at effective cost per action (eCPA), which is how much it cost to get each sale.
For prospecting campaigns, which are to build brand awareness and engagement with your company, look at click through rates (CTR) and overall exposure time.
Q: What is considered “good” for these metrics?
JP: “Good” metrics for retargeting are defined by how much traffic a website is getting and are relative for every business.
The industry average for a prospecting campaign is a CTR of 0.07 percent. A successful prospecting campaign will be above this at 0.09 or 0.1 percent. A good exposure time is above average compared to your benchmarks.
Q: How expensive is it for a small to medium business to launch and optimize a display ad campaign?
JP: The cost will again vary based on what the campaign’s goal. To grow a brand with prospecting you need to start in the $5-10k a month. With this spend you can expect to see lifts in awareness of the site, clicks, and engagement.
Retargeting is less expensive as it scales to the size of a site.
Q: How do I know if I should do a banner campaign, PPC, or retargeting?
JP: Companies should do all three, since they accomplish different things. To start with a banner campaign, evaluate your prospecting goals and the size of your budget. If your goal is to recapture visitors to your site who abandoned or to have a quick return on engagement, start with retargeting and PPC campaigns.
Q: Can display ads beat ad blockers or am I throwing my money away?
JP: You’re not throwing your money away at ad blockers because if an ad is being block it’s not being served there and you don’t have to pay for that inventory. While ad blocking is a concern in the industry, it’s not that pervasive. Only a few browsers block ads and the rest of them are unlikely to follow.
Q: Should I out-source my display ad management or do it in-house?
JP: Outsourcing makes a lot of sense for everything beyond Facebook advertising. You need a lot of time for real time ad bidding and it takes a lot of expertise. Ad management companies also have their own design teams to focus on your creatives and can run your campaigns full—time.
Q: How can I optimize the effectiveness of my display ads?
JP: First, make sure that you are using good creatives. They need to be eye-catching without being to flashy and with strong CTAs. Next, make your ads as personalized as possible, both in your creatives and in how you’re targeting prospects.
Q: What are “red flags” to look out for while my campaign is running? How can I tell if my ad management is running a campaign poorly?
JP: Look for lack of change after feedback in initial performance. You want a company that knows what they’re doing and is always testing your campaign. Also look for strange numbers in your reporting that might indicate the company is not looking out for common things that could indicate a problem. For example, If your CTR is over 1%, there could be a problem with ad fraud.
Q: What are the characteristics of a quality ad management company? Is Google’s Display Network (GDN) really the best?
JP: Quality ad management companies will give you clear and consistent feedback about the campaign. You will see a sustained effort by them to reach and beat your KPI goals. Also consider what demand-side-platform (DSP) each company is using for their bidding. Some companies use smaller versus larger DSPs and that can have limitations on the scope of your targeting.
Google is does not actually have the best GDN. Google has just one of the options that can help you get some extra reach off your display campaign.
Q: How long does it take to see success in a campaign?
JP: This will drastically vary based on the type of your campaign. You will see retargeting results in a couple weeks. Prospecting will take a few months. PPC campaigns have a very immediate positive impact, but this is also restricted to active searches and can be expensive with competition.
For more tips on effective digital advertising, check out our New Year, New AdTech webinar on December 13th!