The Beginner’s Guide To Digital Marketing (And How To Focus On What Matters)
So you want to get in to digital marketing but you don’t know where to start? Well, start at the beginning of course!
Alright, that’s not helpful. But here’s the thing. If you’re creating content and hoping to earn money from it, you’ll be marketing that content digitally at some point in your career. There’s just no way around it.
Whether you decide to take on the task yourself or hire another individual or agency to do it for you, here are a few key digital marketing terms that may sound scary but are actually quite simple — and incredibly important to understand.
KPI — or “Key Performance Indicator”
This is an acronym as old as time in the business world. And it’s actually a lot more simple than it sounds. A “KPI” basically means, “What numbers determine success for you?” So this is one of the most subjective terms in all of business because it can change from company to company, campaign to campaign, and even content to content.
Let’s say you’re putting out a new song on Spotify and you want to promote it with ads. You may decide that the *most* important thing for you is the total number of streams. In that case, your KPI is pretty simple. It’s that big round stream number.
But what if your overall goal is increased engagement on your streams? Your KPI might be a little more specific. For instance — you might be looking at save rate opposed to overall streams. So if your KPI is “What percent of unique listeners saved this song in the first 28 days,” you’ll need to do a little bit of math — dividing saves by listeners.
In this situation, getting 10,000 streams in the first month is a secondary statistic. What you’re really interested in is your save ratio. If that save ratio is higher than the last single you put out, you might consider that growth in a KPI, even if the song had fewer streams in the same time period.
There are essentially infinite KPIs. But identifying your KPIs before you begin a campaign is critical to actually determining the success of the campaign and the value of the money and time you spend on it.
CPM — or “Cost Per Thousand”
CPM is one of the oldest digital marketing terms. It’s also a little confusing, because you’d think the acronym would be “CPT,” but the “M” in this case is actually “mille,” which is the latin word for “thousands.” A little needlessly confusing, but what can you do!
CPM is how much money you pay per 1,000 impressions on a web site. An impression happens any time your ad appears on a website. But this is critical — an impression doesn’t denote the ad was actually seen by somebody. It just means the ad was shown.
So you can see how CPM alone is not a super helpful metric. But! It is a very critical, high level marketing term when it comes to understanding the general cost of your ads. For instance, if the average CPM on Facebook is $10, that means the average person pays $10 for 1,000 ad impressions on Facebook properties. If you’re paying $20 per CPM, that means you’re paying more than average.
Why? It could be a LOT of things. Because digital ads are an “auction” system, it simply means other people are willing to pay more money to reach the same people you are. Your ad might not be very engaging. Your audience might be more expensive. Your targeting might be too narrow (or off in general).
CPM doesn’t give you granular information about your ad performance, but if you’re unhappy with them, looking at your CPM is probably a smart place to start. There’s also a variation of CPM called “Cost Per Reach,” which measures the cost to reach 1,000 unique people. Because if your ad gets 10 impressions on one web page show to one person, that’s still 10 impressions — but your reach is only one. However, if it gets 10 impressions to 10 different people, that may be more valuable information for you in some contexts.
Of course, having a great CPM doesn’t necessarily mean your ads are working, either. These next terms get a little more granular.
CPC or “Cost Per Click”
For a really long time, CPC was the dominant topic in digital marketing. How much does it cost to get somebody to click on your ad? For a lot of advertisers, this is certainly a more relevant number than simply how much it costs to show your ad. And even though there are certainly deeper levels of digital marketing metrics to understand, knowing your CPC still matters.
However, the advent of bot traffic and programs designed to click on your ads in order to cost you more money and tank their performance (seriously, it exists) has certainly rendered CPC less accurate. There are even deeper levels of information we need to know if your ads are working, but CPC is where you start getting serious.
LPV or “Landing Page Views”
When you can track user engagement with your ads beyond their first impressions and actions, that’s when you start really understanding the digital marketing environment. Landing page views are important to measure because they indicate how many people who clicked on your ad actually waited for the web page to load.
You might be thinking, “Is it really that common for people to click on an ad but not wait for the page to load?”
Sometimes it’s a mistake. Sometimes your ad takes too long to load. Sometimes it’s not real traffic. Either way, you may have 100 clicks but only 80 landing page views. Which of these metrics is more important? Ultimately, probably LPV.
Alright, this is where we get into the good stuff. Now, similar to KPI, “conversions” are actually kind of subjective. What you decide is a conversion might be different than what somebody else decides is a conversion.
For instance, if your goal is to get people to sign up to your email list (often referred to as “leads”), then a conversion might be exactly that — a new email list subscriber. But if your goal is to get them to buy a piece of merch, then a conversion is really a sale. What about if you’re just trying to get them to click a secondary link, like choosing a streaming platform on a multi-store link for your music? That could *technically* be a conversion as well.
You get it.
But at the end of the day, conversions and cost per conversion (also CPC but rarely reffered to it as such due to “cost per click” being such a ubiquitous term) are the bread and butter of marketing.
The thing is, to truly understand your conversions — you usually have to own the “property” where you’re asking people to convert. In other words, it can be very hard to properly measure cost per conversions on places that aren’t your website or store. If you wanted to measure cost per conversion for say, somebody signing up to Patreon, you’d have to do it manually and with some error. That’s because right now you can’t actually attribute Facebook, Google, or any other ads to Patreon sign-ups. You can only try to get people to those sites. Once they’re there, you personally lose the ability to track whether they sign up (i.e. “convert”) or not.
But if you have, say, a Shopify store — well, you own that domain and you have the ability to properly track those conversions.
ROI and ROAS
These are the last terms we’ll cover in this article. And in a vacuum, they should be the most important terms because they’re directly related to money. Of course, not everybody’s marketing (especially in digital content) can directly translate to understanding your ROI and ROAS. We’ll explain in a second.
ROI stands for “Return On Investment,” while ROAS stands for “Return On Ad Spend.” ROI can be reported via percentages, dollar amounts, or multiples, but it’s measured in terms of dividing the amount of money you made against the total cost of what you sold. So if you made $1,000 selling t-shirts that cost you $400 to make and $100 to advertise, you had a “2x” ROI, meaning your $1,000 income was twice as much as your $500 cost.
Meanwhile, ROAS stands for “Return On Ad Spend” and deals directly with the efficacy of your ads. These are small but important distinctions.
ROAS are usually reported as a multiple compared to $1 in ad spend. So if you have a 3.2x ROAS, that means the average order value of what you’re selling is 3.2 times as much as it cost you in advertising dollars.
ROI provides a more complete picture on the health of your campaign, but ROAS is critical to understanding the efficacy of your ads. For instance, if you have a 3x ROAS but you’re still ultimately losing money, it probably means your cost to produce whatever you’re selling is too high. Don’t change the ads, but see if you can get what you’re making for cheaper (like merch).
How To Focus On What Matters
It’s tough. Especially as a content creator. Your primary good — the, you know, content — is typically available for everybody to see. At least when it comes to things like YouTube views, Twitch streams, Spotify streams etc. People can go look at how your content is doing and make judgments based on that.
Imagine if every time you walked into a store every item had a little tag next to it of how much it’s been consumed? Jealousy and self-conscious abounds!
So it’s natural to think you want to focus your digital marketing efforts on appearing successful. But at the risk of sounding obvious — it’s more important to focus your efforts on being successful.
There is a healthy balance to creating ad campaigns aimed at increasing high level metrics and ad campaigns that sustain themselves because you’re making sales. But just remember that you’re a business. You should have KPIs and conversion definitions in mind for every campaign. And even though it can be incredibly difficult to measure ROI with things like streaming, do your best to focus your ad spend on things that have a measurable return, like email subscribers and merch sales.
Originally published at https://www.rootnote.co on November 22, 2021.