Although there is no such thing as best or worst in the performance of metrics and everything can vary from project to project, in this lesson I will try to show which metrics are the most important and how you should analyze them.
Let’s start with CPA (Cost per Action (action=backing the project, in our case)). So far this is one of the most important metrics to keep your eye on.
Your target CPA is directly related to your target ROAS (Return on Ad Spend) meaning, the price you’re prepared to pay for each backer. Analyzing all other metrics and keeping an eye on ads will help you avoid wasting money and maintain your target cost.
ROAS of 3 and above is considered good, although you need to do your calculations beforehand, to understand the level of return at which you’re not losing money.
The next metric is CTR (Click through Rate). The CTR describes how attractive your ad is, and how much your audience is interested in it. Technically it shows the percentage of people who clicked on your ad after seeing it. On average 2-3% of CTR is considered to be good, but actually it depends on the project. In some cases we have had an average CTR of ~1%, but the conversion rate was very high. But the rule of thumb remains the same for all cases: if you’re getting good results with 1% CTR, then you’ll get 3x better results with 3% CTR
So if your CTR is low, that can mean two things: your visuals are not attractive to people OR the audience you’re targeting is not as relevant as it could be.
The opposite situation is possible too For example you can have a CTR of 6-7%, but low quality traffic. That might mean that your visuals are not describing the product correctly which misleads people. They click on your ad, go to your campaign page and see something totally different.
CPC (Cost per Click) is one of those metrics that are important but you can’t make any conclusions on whether your ad is good or bad by relying only on CPC. This metric should be analyzed in combination with other important ones and especially with CTR. In general $0.5 (and lower) is a good rate.
CPM (Cost per Mille (1,000 impressions)) – this metric needs to be as low as possible. To calculate the CPM, take the total number of impressions and divide it by 1,000, then divide the campaign budget by that number. Say, if you spend $50 on a campaign and you get 10,000 impressions, your CPM will be $5. Tracking the CPM helps you evaluate the effectiveness of your campaigns. This is one of the metrics which you can’t affect directly. But here are some strategies for optimization:
Analyze Indiegogo and its conversion rate. Make improvements if necessary.
Add engaging features to your post.
Target the right audience.
Test your budget.
Test bidding types.
Broaden your audience.