I think we can all agree that we’re constantly bombarded with ads. From pop-ups across websites, 6 and 15 second clips we’re forced to watch on YouTube and sponsored Stories on Instagram. Traditional metrics like clicks and impressions don’t always tell the whole story when it comes to measuring the ROI of your ad campaigns.
Nowadays, they’re seen as vanity metrics that provide little to no insight into how your audience made the final decision to convert. And if you’re a CMO, business owner, or marketing manager at a high-growth brand, you want to know how to make the most of every dollar you spend to make your media advertising to the most it, can within your budget so you can spend wisely.
That’s why we dive deep into advanced ROI measurement techniques like multi-touch attribution and Lifetime Value of a Client (LVC) analysis. These methods give you a clearer picture of how your ads are driving results to help you make data-driven decisions to optimise your campaigns.
Why multi-touch attribution matters
Nowadays, it’s hard to prove that conversions are from the last ad a client clicked on. Multi-touch attribution takes a more holistic approach, understanding that clients often interact with multiple ads across channels before making a purchase. Here’s an example of what a multi-touch conversion path could look like:
- Someone searches for “Ways to improve SEO” and stumbles across your blog, clicking on the post and reading it.
- The next day, they come back to the same blog and find your YouTube channel with more instructional videos about SEO.
- After a couple more days, they finally decide to sign up for your SEO Masterclass, realising they’ll probably learn more this way instead of self-sourcing information themselves.
This conversion path includes three different touch points: organic search, YouTube videos, and the direct visit to your website.
So, which one gets all the credit when it comes to conversion? Is it organic search since that’s where it all began? Or is it the YouTube videos that convinced them they needed your product? Or maybe it’s the direct search, when they made the final purchase? Why can’t it be a combination of all three?
By understanding the entire client journey, you can clearly see which outlets really contribute to your sales and adjust your campaign strategies accordingly.
Using Lifetime Value of a Client (LVC) to evaluate long-term ad performance
Lifetime Value of a Client or LVC, measures the total revenue a client spends over their lifetime. By measuring LVC, you can understand the long-term impact of your advertising efforts. For example, if your ads are attracting high-value clients who continue to be loyal to your brand, you’ll see better ROI and get more bang for your buck even if the initial conversion rate is lower.
Plus, measuring LVC can help you:
- Boost client loyalty and retention
- Target your ideal clients better
- Reduce client acquisition costs
- Make financial planning easier
- Improve your products and services
Plus, according to Forbes, it’s only 5–20% likely you’ll sell your product or service to a new client, but the chance of selling it to an existing client is about 60–70%.
This shows repeat clients are the Golden Goose and measuring LTV is the key to dialling in on advertising efforts that keep them coming back for more.
In a nutshell, retention is a lot cheaper than acquisition.
Incorporating incrementality testing to identify genuine conversion drivers
Incrementality testing is a way to measure the real impact of specific pieces of your marketing efforts, such as headlines, imagery, or targeting criteria. It works by comparing how a group that sees the ads does versus the group that doesn’t. This helps us understand if the ads actually make a difference. Think of it like A/B testing on steroids.
Here’s a simpler way to say it:
- Choose two groups: One sees ads, the other doesn’t.
- Track their results: See which group does better.
- Measure the difference: This shows how much the ads helped.
By doing this, you can figure out if your marketing strategy is working and adjust where to spend your ad dollars.
In today’s crazy digital world, traditional metrics like clicks and impressions aren’t enough to figure out the true ROI of your media advertising campaigns. But by adopting advanced techniques like multi-touch attribution, Lifetime Value of a Client analysis, and incrementality testing, you can get a deeper understanding of how your ads are driving results and make better decisions to optimise your campaigns.
Remember, it’s not just about the first conversion you get from clients; it’s about the long-term value they can bring to your business. And by focussing on Lifetime Value of a Client and using multi-touch attribution models to get the full picture of the client journey, you can maximise your ROI and achieve long-term success for your business.
