The way in which media is being consumed is constantly changing, with most people having more than one device on the go at once. Although this creates a complex path to purchase, it creates a great opportunity at the top of the funnel for advertisers to get their brand in front of the right people.
When the KPI of a display campaign is to drive a conversion or an action, it’s important that the ads are shown to the right people and not just those who click on the ad and then don’t convert.
You could be targeting the wrong audience…
If you’re generating lots of clicks and no conversions, the traffic you’re driving to the site is of low quality, so you’re probably not targeting the right people with your ads.
Optimising to clicks can mean that you focus your budget on driving the wrong type of user to your site as the characteristics of your target audience and those who are likely to click on an ad could be completely different.
When your objective is conversions, you need to fully understand the traits and behaviours of your converting audience. Display campaigns allow brands to gather more and more data on who this converting audience is, meaning you can build a picture of the characteristics your actual audience possess, and then target campaigns to people with similar characteristics.
The more conversions we see, the more overlaps we’ll find in the data, giving us a more accurate and clear indication of who our audience is as time goes on, and making the process easier and more efficient.
…in the wrong context
Optimising to clicks can also mean that your ads are shown in the wrong context, often, low quality mobile inventory as this is where a lot of clicks come from. Mobile inventory tends to get a high click-through rate as the screen is a lot smaller, meaning it’s a lot easier for users to click on the ad as it takes up more of the page, sometimes leading to accidental clicks.
So by optimising to clicks, you’ll be buying more of the inventory that has a great click-through rate and low CPC but significantly, low conversion rates. By optimising to conversions, you can eliminate optimising towards accidental clicks and users who aren’t interested in your brand.
CPC vs CPM
Buying display on a CPC optimises to the problems above, you’ll be spending more money on finding users who are likely to click, not convert. It can also lead to high frequencies where you could be serving a huge amount of impressions to someone to try and get that click.
Buying on a CPC can result in a user being targeted with an ad 20, 30 or even more times as the tech is trying to drive that click but in reality, these ads can be an intrusion to the user and have a negative effect on your brand.
If you buy on a CPM (cost per thousand impressions), it allows access to better data sets as this data charge is included in the CPM rate and means we can bid on each impression based on the user’s propensity to convert. So, if the user is showing all of the right characteristics, we can bid high for that impression, if a user has a low propensity to convert we can bid low.
Buying on a CPM also gives much better access to premium inventory; your ads and your brand will appear alongside good quality content that’s in context to what you’re advertising, in front of users who are likely to convert.
Creating intent to convert
The effectiveness of PPC ads is that they capitalise on intent; a user has indicated they want to find something by actively searching for it.
An advantage of display is that it can create that intent in the first place; to get your brand in front of the user before they’ve made the decision on what it is they’re looking for, so that you’re either creating that intent there and then, or so that when they do decide, your brand is at the front of their mind.
Display also targets users when they’re consuming other content online, whether that’s checking emails or reading the news, and users often don’t want to navigate away from the content they’re on. However, if your brand is put in front of the right people, we can create that intent and drive users to the site, often through other channels when someone has seen the ad and then searched for it at a later time, initiated by the display impression.
For a conversion campaign, optimising to click-through rate is an inefficient way to utilise your budget, when it could be used to find and target your converting audience and focus on incremental conversions.