If you follow me on Twitter, you know I’m a scathing critic of the New York Jets and an uninvited commenter on the Real Housewives of Atlanta.
You may have noticed, though, that I am a tireless advocate for SEM audience and asset segmentation.
Brand vs. non-brand, first-time vs. recurring visitors, high HHI (high household income) earning women aged 25–35 vs. coupon customers aged 65 and up. Every aspect and target audience is unique.
It’s absurd to subject everything to the same measuring standard.
“Jon, I have an overall aim,” one may remark. I anticipate that all efforts will be successful. Otherwise, it’s just not worth it to operate them.”
“Well, here’s a conundrum for you,” I say. How much lower is your brand CPC compared to non-brand, or how much higher is the conversion rate of recurring customers compared to first-timers?”
Even though you have an overall aim, you must keep in mind that each aspect will perform differently.
Moreover, the numerous performance levels must unite to funnel into a single performance KPI (Key Performance Indicator) (Key Performance Indicator).
If you eliminate any attempts that don’t match the aggregate KPI you established across the board, you won’t be able to attract new clients, and your traffic will gradually dwindle.
Need Proof? Well, Here You Go
“Client N” is what we see here.
They are an e-commerce business that offers bacon and other smoked meats directly to consumers (yes, it is delicious).
We divide our targets into two groups: basic brand vs. non-brand, as well as NTF (first-time buyers) vs. repeat buyers.
Our AOV (Average Order Value) is influenced by pricing, which is influenced by market prices, hence we prioritize conversion above ROAS (Return on Ad Spend).
We know that a consumer will make two to three purchases every year over the next five years.
While gaining repeat sales on our brand is extremely cost-effective and pays the bills, we know that it is now a depreciating asset.
Spoiler alert: Never stop assisting repeat customers, but push aggressively for new customers.
As a result, we have six separate KPIs (and their justifications):
CPC KPI at a low level.
Why: Because they are brand loyal and likely to buy, we want to keep the CPC (cost per click) as low as possible when directing them to the product we want to promote.
NTF is a Trademark
KPIs for high traffic and mid-level CPC.
Why: Brand awareness, generally a recipient of a gift or other marketing, high conversion likelihood, CPC is more expensive, so if we can control it, the LTV ROAS will be higher.
- KPI for CPA (Cost per Action).
- They have no loyalty; they have previously purchased from us but have not returned to us by name; therefore, it is more reasonable to concentrate on a certain CPA goal because a subsequent purchase is unlikely.
- It’s worth noting that this is the least valuable consumer and demonstrates a lack of devotion to the brand.
- High Visitor Count & Impression KPIs should be shared.
- You want as many of them as possible, and in a crowded market, you may have to sacrifice money (since this will not be cheap) in exchange for exposure (make sure you have a nice ad).
- You’ll make up for a conversion on the back end.
Shopping (We Don’t Separate NTF from Repeat)
- ROAS KPI and conversion volume.
- After brand, this is our moneymaker. Increase your sales volume as much as possible. Given the ad unit, clicks are less expensive. Just make sure your ROAS doesn’t go below 110 percent.
- KPI for Brand Awareness.
- This isn’t generating direct sales for us. It raises brand recognition, therefore we use the lowest CPV (Cost per Thousand Impressions) on our 30-second movies and test it regionally to see how many inbound first-time brand visitors come to the site.
- The visits are collected for retargeting purposes.
“Client S” is another example.
They are a nationwide chain of senior living homes.
Their main concentration is on generating leads through form submissions or long-distance phone calls.
We sort by brand and non-brand keywords, as well as the services supplied, as usual. As recurring income, each service has a variable lifetime value.
Independent living has a larger volume, a longer LTV, and lower revenue per person than assisted living.
Memory Care, on the other hand, has the lowest volume and the shortest LTV duration, but the highest beginning income in the first three years.
We operate with three different KPIs:
- KPI with high traffic and a mid-low CPC.
- Because there is so much competition, the aim is sheer volume if you have good pricing and a good location. However, if the CPC climbs beyond $11 (due to competition), there is a good likelihood that clicks will drop off a cliff because there is no further funding.
- KPI for CPA.
- There is little competition, but there are a lot of researchers, which lowers the CTR (Clickthrough Rate) and raises the CPC. The idea is to concentrate on the CPA itself, keeping in mind that the LTV length is 25% of Independent Living. Memory Care generates more money in three years than Independent Living does in eight.
- CPC KPI is low.
- There is a lot of competitiveness, and everyone is scrutinized since there is so much research involved. You don’t have to be in position 1, just visible, and acquire the traffic for as little money as possible, because with fixed budgets, a $0.50 difference in CPC can drastically reduce traffic.
Okay, I’ve seen Your Proof now What?
We establish the goal figures for each KPI after we’ve discovered the ones that are required.
This indicates that “Brand Repeat CPC cannot surpass $0.50” or “Non-Brand NTF must drive at least 250 clicks per week with a 15 percent impression share and a CPC not exceeding $0.75.”
For budget allocation, we split the budget from most value to least useful.
Then we’ll be able to see if the budget allocation will achieve the overall ROAS goals.