This document is for Media Buyers, Brand Marketing Directors, and Brand Owners that are analyzing first click ROI and are not sure if their performance is acceptable.
Why You Need This
Top of the funnel campaigns usually run at a loss initially. Most businesses, even ecommerce, have a customer journey that takes place. Different messaging progresses a prospect to a lead to a sale. This customer journey can take weeks or even months.
So how can you tell if a top funnel campaign is working?
ROI, LTV, and revenue are numbers that are critical to your business will give you the answer. These metrics are also very relative to your business. One business might be overjoyed with a $500,000 month and another business might be distraught at only making $500,000/month.
This means you need benchmarks to find out if your top of the funnel first click campaign is driving initial awareness that is turning into customers at a better rate than you usually do.
Marketing attribution data based on your business, in your industry, based on your price point, and the goal of the marketing campaign is also extremely relative to your business based on how long a campaign has been running, and the correct attribution model being applied to evaluate the campaign.
If you are making 25% ROI after 14 days of a campaign that acquires new leads, is that good? Time to scale? Time to kill the campaign? Or maybe chill out and give it time to generate more revenue?
The way to answer those questions is by comparing your campaign performance by the attribution model that matches the campaign goal against all your other campaign's performance by the same attribution model after the same amount of time has elapsed.
This is not a trivial task to setup and perform. Fortunately, we do all this for you with our campaign benchmark feature.
Common Marketing Optimization Scenarios that First Click ROI Benchmarks can Solve
- Can I scale my budget on this high ROI top funnel campaign or is the rate of ROI slowing down?
- Can I keep spending on this top of the funnel traffic that haven't bought at positive ROI yet?
- Can I keep spending on this top funnel campaign that had high ROI that has slowly been dropping over time?
- Should I kill this top funnel campaign that has negative ROI but has been trending up?
- How much do my top funnel campaigns generate on average at a point in time?
How to use the ROI Benchmarks with First Click Attribution
ROI Benchmarks snapshot your marketing campaign performance and compare them against all your other campaigns after the same amount of time using the attribution model you have selected.
This article assumes you understand https://help.wickedreports.com/how-to-use-the-roi-report and First Click attribution https://help.wickedreports.com/first-click-attribution.
Access the benchmarks for any marketing campaign by selecting Benchmarks from the Wicked Tools menu on that campaign's row from the ROI report.
This will open up and load the Benchmark metrics for this campaign below the ROI row.
Here is a Google search campaign with so-so ROI and it's benchmarks. The question - since 105% is barely enough to cover product costs, and the campaign has been running for 30 days, is it time to kill it?
When looking at benchmarks, the first factor to keep in mind is time. The proper perspective on time can be a great edge for you. Either your campaigns get a lot stronger ROI over time as the leads buy, or the campaigns fizzle out after an initial burst of revenue.
Benchmarks are calculated from the very first tracked click for the campaign. So the benchmark data will not match the ROI campaign data unless your ROI time filter begins at the first tracked click date of the campaign.
First click attribution is built to measure the lifetime value of that 1st click vs. the costs to acquire the first click. Let's look at all 4 benchmark tabs and see what we can learn. First, the Clicks tab:
Top of the funnel initial brand awareness campaigns are all about getting new eyeballs in the form of clicks to eventually convert into high LTV customers. From the click benchmarks tab, we can learn the following:
1. Am I getting more or less traffic than normal? The answer for this campaign is a resounding yes. 29,847 clicks is 769% more clicks that the average campaign click count after 30 days.
2. How expensive are clicks in this campaign vs. my usual price? In this campaign, CPC is $1.29, which is 135% more expensive than the average.
3. Are the clicks turning into revenue? We see EPC (earnings per click) is $2.67, which is 193% higher than average EPC.
It's fine to have a higher CPC as long as the EPC is higher. In this case, while the cost of the clicks is a lot higher than average, the value of those clicks is almost 200% higher than average.
We turn to the sales tab:
The sales and revenue numbers above are based on first click attribution.
1. Are sales & revenue better than my average first click sales & revenue benchmarks? Revenue is showing at 2,442% above benchmark, and sales are 426, which is 2,267% above benchmark. Pretty awesome compared to the normal first click performance after 30 days.
2. How is ROI on the investment to acquire the first click sales? The ROI here is 107%, which is 64% better than the average first click ROI after 30 days.
3. What is the trend? Gotta love that up and to the right slope, the trend looks like the sky is the limit.
The customer benchmarks:
The first click sales on day 1 = 3. On day 60 = 401!!! Talk about first clicks buying over time! Let's analyze:
1. What is the campaign CAC vs benchmark? At the 30 day mark of this campaign, CAC is 14% lower than average. Great news
2. LTV vs. benchmark? LTV is $198, 48% higher than average LTV after 30 days.
3. CAC vs. LTV? Customers are being acquired cheaper than their value. Keep in mind this is before product costs.
All signs point to this campaign being a big winner at the top of the funnel. Scale the ad spend.
Marketing Optimization Tips
When ROI is higher than your average benchmark, and the time to reach that higher ROI is acceptable, increase your budget for this campaign.
If LTV is trending higher and is above CAC, and CAC is lowering or leveling off, keep campaign running. If the LTV to CAC spread is high enough, and happens in an acceptable timeframe, increase your budget for this campaign.
When ROI is lower than your average benchmark, and is not trending up, time to kill the campaign and allocate budget elsewhere.
Notice in the charts above, there was a great change in the data between days 30 & 60. Consider a longer time frame to evaluate success of your top of the funnel campaigns. New leads take time to buy.
- The stats in the benchmarks do not match the stats on the ROI campaign report unless the start and end date of the ROI report match the start and end date of the campaign. Use this to your benefit, you can see near-term ROI performance vs overall campaign performance over time from the benchmark to spot trends.
- If the benchmark section seems to advanced, simply focus on ROI based on the attribution model that maps to the campaign goal.
- If you are doing spray and pray marketing, that's ok, use full impact or linear attribution models.