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Basic ad serving metrics: conversions and events (part 2)

In addition to impressions and clicks, conversions and events are two other important metrics that you should track when evaluating the performance of your ad campaigns.

Conversions

Conversions refer to the number of times a user completes a desired action after clicking on an ad. This could be a lead, a purchase, a registration, or a form submission. In order to enable conversion tracking, the advertiser needs to place some code from the ad server to record the conversion result on their site, typically on the Thank-You or Confirmation page.

Conversions are an important metric for measuring the success of an ad campaign. Arguably, it is the most important metric for the advertisers because that is exactly what the advertisers want as their return on investment (ROI). They pay for the ad and then actually get some direct and measurable result in return. Conversions are sold using CPA rate, or cost per action, also cost per acquisition. Therefore, it is important for the advertiser to clearly define what they really want as conversions. Fortunately, ad servers typically support multiple types of conversions and so you do not have to choose just one type. Each conversion can also have a monetary value associated with it for reporting purposes.

For example, a newsletter subscriber costs $1, a registration costs $5 and a purchase costs $10. The value highly depends on the advertised products and services. The higher the number of conversions and monetary value, the more successful your ad campaign is.

Events

Video ads generate interaction and progress events during playback. A VAST-compliant video player will make requests to the video ad server to record events at different stages.

For example, when the video ad starts playing then a Start event will be counted. Other VAST video events include: 1st-Quartile event when 25% of the video ad has played, Mid-point event when 50% of the video ad has played, 3rd-Quartile event when 75% of the video ad has played, Complete event when the video ad has played to completion, Skip event when the user skips the ad before it has completed, Mute/Unmute event when the user mutes or unmutes the ad, Pause/Resume when the user pauses or resumes the ad playback.

There are also other interaction and custom events that the publishers and advertisers can define and track. Events are useful to understand user engagement and interaction with the ad. They also provide data to ad servers and advertisers about how the ad is performing.

Context

It's important to note that these metrics should be analyzed in context and in combination with each other and not in isolation because they provide different insights about your ad campaign. For example, a high number of impressions does not necessarily mean a successful campaign, as it might contain fake impressions and does not take into account engagement or conversions. Similarly, a high number of clicks does not necessarily mean a successful campaign, as it might include fraudulent clicks and does not take into account the relevance of the ad to the audience. Therefore, it is crucial to track and analyze all ad serving metrics together to get a comprehensive understanding of the performance of your ad campaign.

To optimize your campaigns, you should always aim to increase the number of impressions, clicks, and conversions while maintaining or increasing the CTR. This can be achieved by testing different ad variants, ad formats, targeting options, ad placements, and by continually refining your ad copy and design.

Posted in Advertising Glossary by John Z April 25, 2023

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