CPM, CPC, Bounce rate, WTF?
Metrics in context regarding your upper and middle funnel
Reading time: 3 mins
by Gergő Bárándi
- I’ll start a webshop, what should I do first?
- Set up every web analytics and ad side tracking.
Of course.
Spendings, transactions, revenue, ROAS.
Impressions, clicks, ctr, sessions, users, bounce rate.
Reach, frequency, CPM, etc, etc.
Of course.
In this article I don’t want to speak about numbers, and also not fancy to discuss the importance of roas. These above are must-have, in case you have doubts about your knowledge, contact me and I’ll catch you up. The topic I’m sniffing around is setting the KPI’s in the upper & middle funnel and applying these correctly to your own preferences when building awarness and purchase intent.
So where should we look first?
The answer is your product or service. I assume you already know that in the current moment your product or service is designed to consume by broad or a fairly narrow audience. Also mixed answers is possible since we still do not see into the future. Just remember, who thought in 2018 that the facemask market will grow by thousands of percents to 2021.
Let’s suppose that you start a webshop which sells several styles of shoes for men. This is a pretty broad audience since men wear shoes also.
We need to implement the existence of your shop in the target group’s mind. This is where digital marketers recommend most of the brand advertising activities and this is the part where we have to beg for money. Most of the rookie webshop owners go for instant sales in the first place without building awarness, and I don’t want to state that this is impossible, however in a world, where advertising platforms offers us the amount of data which would be though to measure in money, we should rely on these platforms’ knowledge.
I strongly recommend a nice seeding period before entering any lower parts of a sales funnel, not because I’m a brand lover fancy snob, but because of the amount of data it’s possible to collect under a seeding phase. Here I must mention brand video viewers, post engagers and their lookalikes and the possibility to retarget them, before you paid any beans for a click to your website from anyone. In this period please rely on broad targeting provided by algorythms, since those have a fair knowledge about what kind of men users will engage with an online shoe store’s ads and content.
Metrics to track
CPM: Cost per mille is a metric used to measure the price of reaching thousand of users. In digital advertising where algorithms also work on keeping users in the app/feed/etc for longer time we have to provide relevant ads and content for those. Yes, for those. You provide assets for the algorithms running behind the apps, websites, where the users spending their time and the algorithm will display it, when the relevance could be good. If CPM is too high compared to market benchmarks, always check your targeting to not to be to narrow and the quality of your creative assets.
Frequency: Ad frequency is a metric, which tells you on average how many times users seen your ad. If you are able to keep frequency down and reach high, your targeting and assets are fine. In every other case, you need to turn your focus to your targeting and assets again.
Engagement: Views, see more button clicks, ad expandings, comments, etc. is pretty important data to gain, since engagers will be the key part in the middle of your sales funnel. Always make sure that you generating cheap and mass engagement with asking the right questions or triggering explorer or positive reactions.
Viral reach: In case you are able to measure any viral reach, such as shares on social media, you definetely should. Also if you brave enough to go viral with a simple message, you should go for it. It may be divisive, so it’s always up to you and your message.
Now let’s dive deeper into the funnel
You have an engaged audience and a bunch of users, who are similar to those who engaged with your awarness content. These users already seen your logo, ads, some of them did a brand search or typed your brand into the address bar and probably visited your site already. Now it’s time to traffic as much users as possible to your webshop to see how they behave on your site. This is where I recommend to implement 2 tactics and not to bet boldly on just one of them.
In one hand, we are about to explore how these users behave on the site, but kids need new a gear, and I want to go to some exotic countries this year, so we both need money. Let’s split up the budget (fairly 50-50% or 40-60%) and start to test what happens when we trafficing as much clicks as possible (maximize clicks and landing page view, hello) from the audiences mentioned above, and see how efficient is when we ask the algorithm to provide us more qualified users who will probably shop on your site (maximize conversions and purchase optimizing hello).
The number of users incoming to the webshop should be different from the two tactics, and the second, conversion optimized should realize better roas, however law of big numbers tell us that significantly more clicks can provide more transactions also.
And the jackpot: this tactics opening up the possibility to create more audiences. Of course, one based on users who became instant shoppers any products by jumping to the end of the funnel, and there are plenty of other to exclude or include in further segmentation, like users who added someting into their shopping cart, started checkout, or so, but this is an other post.
Metrics to track in the middle of your funnel:
CPM: same as above
Frequency: same as above, now with smaller audiences.
CPC: Cost per click, this metric will let you know how much did you pay for a click. When using traffic optimized campaigns, you should keep this cost as low as possible. In case you use conversion optimized strategies, it won’t be a prior metric until ROAS seems good.
With the following metrics, we will enter some kind of web analytics platform and since now I recommend to create segments in your website audience. Demographic, geographic, interests, depends on context.
Bounce rate: Bounce rate is single-page sessions divided by all sessions, or the percentage of all sessions on your site in which users viewed only a single page and triggered only a single request to the Analytics server. (more info here)
Avg. time spent on site metric will show you exactly what is it called.
Exit pages: This is not a KPI, but could be useful: this report shows you where most of the users exited your site. Pretty good place to spot low performing product pages.
Going trough any webshop’s sales funnel there are a lot of possible outcomes in every way and when measuring digital marketing’s success, the final word will also be the ROAS number. I hope that the advices above helped you to get a deeper understanding about putting vary of digital marketing metrics into context when working with broader audience.