KPI

Advertising costs

Advertising costs is a crucial KPI to track for all your ad campaigns. Here's all the information you need about this KPI: what it is, why it's important, how to calculate it, and way more!

TRACK YOUR ADVERTISING COSTS!

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What are advertising costs?

The advertising cost is the total amount of your online advertising costs and offline advertising costs. This metric is very important in order to manage your marketing budget or ad budget. This covers expenses such as cover ads in print media and online venues, broadcast time, radio time, and direct mail advertising.

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How to calculate advertising costs?

The ads cost calculation is very easy, simply take all the ad spend of all your advertising platforms and campaigns (from Facebook advertising to Google Ads, or billboards.) and add them up.

The advertising costs calculation:

Online advertising costs + offline advertising costs = Total advertising costs.

What is a good advertising cost?

A good ads cost depends on multiple factors such as your target audience, advertising budget, ad format and marketing strategy. Ideally the lower the cost for the most conversions, the better. Make sure to track your return on investment, by reducing the cost of advertising you’ll improve your ROI as well. To give you a rule of thumb, companies tend to spend between 2-5% of their sales revenue on marketing, and the average cost to reach 1,000 people with online advertising Ranges from $3-$10.

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What is a bad advertising cost?

If you’ve busted your online ads budget, or spent way more on digital advertising campaigns that had a very high average CPM, you might consider this a bad ad cost. Make sure to track your ad auctions and average CPC very closely, particularly if you are a small business or have a smaller daily budget, to ensure you don’t pay too much for your ads. Make sure you also target the right demographic and target audience so that you don't spend money for nothing.

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Advertising costs KPI examples & templates

Add your advertising cost to these reports for a good view of all your online marketing strategy metrics and overall online performance.

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Ecommerce report template Ecommerce report template

A report with all the most important metrics for your ecommerce site, like shopping cart abandonment, click-through rate, ad costs, and revenue.

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Executive report template Executive report template

This template is filled with business metrics perfect for small business owners and bigger companies executives. Showcase your revenue, new customers, churn rate, and more.

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PPC report template PPC report template

Check your metrics from all your marketing channels and social media platforms from instagram ads, Facebook advertising, google search ads, bing ads, or Linkedin ads. You can also track this data alongside your business metrics and industry benchmark.

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Advertising cost best practices

Here are some of the best practices you should keep in mind to improve your advertising cost.

Advertising cost best practices

step 1 icon Use the Right Targeting options

Whether you use display ads, search engine ads, or social network ads, there are targeting options you can use to make sure you reach the right audience. For example, if you’re in the real estate business and try to find middle aged couples looking for homes, you probably shouldn’t target teenagers or elderly people. By reaching people that are most likely to convert, you should pay less for your ads, and have a better ROI.

step 2 icon Optimize your landing pages

Your Landing pages are just as important as your search or display network ads. Once people click on your ads, that’s when the convincing really starts. Make sure you add CTAs at the top fo the page, that your titles are enticing (maybe offer a promo code, or focus on your most important benefits). Other tips include: having a short page, have images and not too much text, as well as having a personalized landing page for each type of ad or persona you are trying to reach.

step 3 icon Combine ads with other digital marketing strategies

Not all digital marketing has to be costly, if you invest some of your time on search engine optimization, brand awareness, direct mail marketing, email marketing, social media campaigns, retargeting campaigns, and more, all these efforts combined should help your conversions in the long run. People will recognize your brand, they will have interacted with it, and trust it way more than if they’ve never heard of you and see a display ad for your product or service.

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