I used to own a digital agency. I had a client who was the 80 year old CEO of a 120 year old military contractor. He sat through a meeting where his 27 year old marketing manager and I walked through advertising metrics for digital ads. At the end he said,
“This is all very interesting, and will be helpful for Kelly (the marketing manager). I’m going to decide if we renew next year with this: increase in sales divided by ad spend. I’m looking for a number greater than 3.”
This is the dichotomy. The company’s purchasing the ads want to spend based on conversions - the ad companies want to charge based on impression or clicks (if forced).
They did. We got them 5.2, but it was very hard, and it was also very good for our team to have to deal with a hard metric target. We got a lot better at ad buys.
“This is all very interesting, and will be helpful for Kelly (the marketing manager). I’m going to decide if we renew next year with this: increase in sales divided by ad spend. I’m looking for a number greater than 3.”