How Total Ad Value Will Change Everything You Know About Marketing
Today’s marketers are driven by data. Everything they do has to be substantiated with studies and detailed reports of the successes and failures of each campaign. Trouble is, as things stand, marketing tools are only tracking half the picture. While they track the effectiveness of driving behaviors, like click-throughs, they don’t provide deeper insights about what happens after the click. No matter how effective the ad campaign, the report won’t show that 99% of traffic driven to native app installs is lost to friction, and that landing pages suffer an 85% bounce rate.
So we got to thinking. What if there was a new metric that marketers could use to more accurately report the effectiveness and strategies of campaigns?
Call it TAV. Total Ad Value.
What is TAV?
We spend precious resources — in time, money, and human ingenuity — crafting brilliant ad campaigns for a huge group of channels, directing audiences to a specific place or action. Too often, the focus on driving that engagement obscures the bigger picture of what happens when a user’s taken the action you wanted of them.
We spend so much time working on the ad unit that we forego developing a brilliant landing unit.
Total Ad Value, in a nutshell, adds together the effectiveness of the ad unit with the effectiveness of the landing unit.
While the nitty-gritty of how campaign results relate to revenue can be rocky — in an awareness campaign, how would you judge TAV? — this concept is an exercise in taking a step back and thinking about what happens after the click or engagement.
Are they arriving on a landing page? At an e-commerce item? At a social sharing prompt? A native app download? If that experience isn’t part of the planning process for the ad campaign, it probably isn’t considered in the metrics, either.
And if it isn’t, your metrics are only reporting on half the picture.
How to measure TAV for Apps
As a thought experiment, say that an app install campaign spent $100 million for one billion impressions on social media, and yielded a 2.5% click-through rate. That’s twenty five million clicks, and an unbelievably successful campaign.
Let’s also say that the campaign’s goal was to drive app downloads and continued usage. We know that download friction leads to an appalling 99% loss in downloads immediately, and abandonment rates are considered acceptable at 85%.
Of the twenty five million clicks, only two hundred fifty thousand make it past download friction.
Going back to the initial investment of $100M, that’s $400 per download.
Alarm bells should already be going off, but let’s take it one step further. App abandonment rates are astronomical and vary per app genre, but let’s take the 85% number as our example.
Losing 85% of users leave only 37,500 total users who downloaded and stuck with the app. The cost-per-acquisition of these customers?
What would the lifetime value of these consumers need to be to mitigate those staggering costs?
For a Coca Cola customer, for instance, whose average lifetime value in 2012 was $45.47 per year, the campaign is a massive loss.
How to measure TAV for web pages
Say that we decided to direct the above campaign directly to a website rather than a mobile app download page. We have our $100M in spending, one billion impressions, and 2.5% CTR, leaving us with twenty five million clicks.
Bounce rates on the web are huge. According to a Kissmetrics study, bounce rate across all industries is at an average of 40.5%. Among those, Retail sites average 20%-40%, content sites average 40%-60%, and landing pages bounce 70%-90% of visitors.
Looking at landing pages, our $100M, twenty five million-click campaign would lose 17.5 million of those clicks to bounce at a minimum. The worst-case scenario is that only 2.5 million of those clicks actually see the content. That $100M investment ends up costing $40 per visitor.
In Coca Cola’s case, that single campaign is almost covered by the annual value of the customer. Even if the per-customer cost is significantly lower for landing pages, the return doesn’t justify the investment.
Opening the floodgates
For most marketers, these numbers aren’t all too surprising, and the real numbers are significantly worse, as CTRs almost never reach 2.5% in campaigns. And those rates aren’t where the real trouble is.
When we look at the customer journey, we see that the bottleneck is in download friction and bounce rates — also a known quantity. In response to those issues, the practice of buying more impressions to boost final numbers became commonplace.
These are just a couple of examples of how looking at campaigns from the perspective of Total Ad Value can shake the foundations of digital marketing. These barriers are considered inevitable costs of doing digital business.
But what if we could break that barrier? What if, using Instant Apps, we could guarantee, 15% bounce rates on mobile web campaigns? You’d be looking at 21.5 million users sticking around to get your message. That’s just over $4 per user.
Or what if you decided to forego your native app entirely, replacing the experience with an Instant App? That 99% download friction is no longer in question, and the full twenty five million clicks go straight to your content.
When you take TAV into account, and build the post-click experience into your campaign planning, you can make a monumental difference in performance.