If you’ve launched an advertising campaign to attract potential customers, it’s important to clearly understand whether the campaign is bringing you customers.
Why track the effectiveness of an advertising campaign
Regardless of what channel you use to attract customers, the first thing you need to do is to clearly answer the question:
How many potential customers (hereinafter referred to as leads) does your advertising bring you?
If you don’t know, it’s a problem.
If you are working with a contractor and they do not report to you on the number of leads from your advertising, we do not recommend working with such a contractor. Businesses should always clearly understand how much it costs to attract a potential client from advertising.
What can this mean for you
If your advertising is unprofitable, you will increase the unprofitability of your advertising campaign and spend more money if you increase your budget.
What indicators can and should be tracked
In the case of a service business, for example, a car service, a service station, a tyre service, a beauty salon, a translation agency, or other similar business, you usually need to track all forms on the website and phone calls.
If you only receive orders through a form on your website, then tracking forms will be enough.
In case of a large number of orders by phone (15% or more), we also recommend installing call tracking services that will clearly identify which advertising channel the lead (potential client) came from.
How an advertising report can look like
For example:
| Month | Budget (USD) | Number of leads | Cost per lead |
| February | 500 | 22 | 22.7 |
| March | 650 | 31 | 21 |
| April | 800 | 44 | 18.2 |
This table shows the most important information – the cost per lead (potential customer).
This way, you can clearly understand the budget needed to generate 10, 30, or 100 inquiries from potential clients.
In summary, a service-based business should track at least two key metrics:
- Number of leads
- Cost per lead
Without tracking these metrics, launching an ad campaign for a service business is not recommended.
Internal Metrics of Advertising Campaigns
Should you monitor internal advertising metrics such as: cost per click, cost per 1,000 impressions, maximum bid, search queries, etc.?
Internal campaign metrics are only necessary for the specialist managing the campaign, so businesses are advised not to interfere with them.
Why?
Because it doesn’t matter how much a click costs if the cost per potential client is acceptable and profitable for the business owner. Lowering bids (to reduce the cost per click) may result in fewer potential leads.
These settings should only be adjusted by a specialist who understands how the advertising algorithms work.
Conclusion:
Before launching an ad campaign on Google Ads, Facebook Ads, Instagram Ads, or any other channel, it is essential to track at least two key performance indicators:
- Number of leads
- Cost per lead
If these metrics aren’t tracked, you won’t be able to assess whether the ad campaign is profitable.
Internal advertising metrics are important for specialists managing the campaign, but relying solely on them is not recommended, as they do not reflect the true effectiveness of the campaign.
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