How to know if your paid ads campaign is effective
What metrics are useful to validate your product during its first ads campaign?
It may depend on the niche, but there are some common indicators that can help you get it right no matter what type of product you’re advertising.
Recently our team validated a SaaS idea in the travel industry. Hugfare is a service that helps people from different countries to find the optimal meeting point considering budget, entry restrictions, interests and more. The app also helps to book accommodation and buy travel tickets.
Vladislav Sholokhov, the UA manager working on the product, wrote down some insights and problems our team encountered during the idea validation process.
Have a look — you’ll find helpful tips to reach your first customers!
What is your dream channel to advertise?
When you’re dealing with the channels to start your advertising campaigns, you may think about which to test first. During the Hugfare validation, we saw the need to test several of them at once. And here is why.
In the beginning, we started testing Facebook advertisement channels. The first results were OK with $1.1 per click, especially when working on USA campaigns with madly high CPM. When we got such results we were quick to optimize the campaigns to double down on the best creatives and messages.
After the optimization, the results immediately became better. We had $0.74 CPC. Still, when we decided to test another advertisement channel (in this case it was Quora) we were surprised to achieve $0.17 CPC. The cost per click on Quora was almost 4 times lower than on Facebook!
Of course, we got such great results from the start partly because we’d already tested our ads on Facebook and found out which messages worked better with which visuals.
But let’s emphasize once again that we didn’t expect to get $0.17-$0.22 on Quora, that is why we decided to test it later. As our experience showed us, no matter which channel looks the most promising, in reality, you can achieve some different results. So it’s important to start different campaigns on various channels simultaneously.
Still, you can’t evaluate the ads channel only based on CPC. While Quora was way cheaper than Facebook in terms of cost per click, in the end, the conversion results from Facebook still proved to be better.
We can only assume which conversion and click rates will the next product have. That is why it’s better to test all the selected channels at once to achieve better results within your budget.
Does high CTR equal success in the advertisement campaign?
Of course, CTR (click-through rate) is an important metric, but engagement is no less important. Engagement affects CR (click rate) directly and shows whether the product has value for the audience and how good your product website is.
Let’s talk about examples. Our Hugfare website looked very attractive, CTR on the creatives was higher than a medium for such a narrowly targeted product (1.2% per link click and 3.5–4.5% if considering all the clicks on the ads). Still, the engagement was lower than we expected and we didn’t manage to get a target Conversion Rate (CR).
It seemed that we did everything right but the results were far away from the expectations. The sign-up rate was only 1.9%. The main reason, in our opinion, was that users didn’t need the product that we were offering.
So please note, that even if you’ve created an ad with a high CTR, you won’t necessarily get a good CR. Make sure your website works correctly on all the devices and that its content corresponds to the message on the creatives you’ve made.
Sometimes inaccuracy in advertisement creatives and messages can lead to bad results on the ads campaign in general. In such a case, even with the great CTR, the engagement of your target audience will be way less than expected.
If there’s a discrepancy between the creative message and the content of the website, a person gets the feeling that they were deceived. With a high probability, in the next few seconds, such a user will close the site and return to scroll through the feed.
And of course, remember that your product must clearly convey value to the users.
Are your ads effective?
When analyzing advertisement channels, pay attention not only to the cost of a click but also to the cost of a conversion. For example, while using Quora, we managed to make CPC several times lower than on Facebook, but the total cost of conversion in Facebook turned out to be lower.
Until you have enough data to objectively evaluate performance, Quora can be confusing and seem like the most effective channel. But, as it turned out later, not all the clicks that Quora gave went to the site itself and got us results.
That is why it is important to have analytics set up on the site, such as Google Analytics or Splitbee. And it’s better to install two at once, so that you have the most objective information, and analytics systems do not distort the data.
Bottom line
While working on the very first startup paid ads campaign or just simply validating your idea, check these things to stay on the right track:
- Test all advertisement channels at once for better results with lower expenses.
- High CTR doesn’t mean your campaign will get high CR. Look at other metrics like engagement too.
- Avoid inaccuracy and discrepancy between ads and the actual offer.
- Always bring value to users with your product.
- Install several analytical tools on your website to measure objective data.
