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How to make Performance Predictions for Online Ads
Today we will not discuss how to calculate the various metrics and KPIs necessary when running online ads.
Instead, we will analyse the process and basic steps for making online ads performance forecasts.
This one is simpler than it sounds because it’s pure mathematical calculation. So let’s dive right in!
Why do I need to make a Performance Prediction?
The reason behind making a performance prediction is that ideally, you want to follow a systematic approach when running ads and not see each advertisement campaign as a standalone marketing effort.
So before building your advertisement campaign, setting up a well-defined strategy of how the various online campaigns are going to lead you to your goal, is a good practice.
Preliminary Work: What is your Main Goal and How to Get There?
So the main question to start with will be “What is the main goal I would like to achieve and which online ad platform and campaigns types (e.g. Facebook, Instagram, Google, LinkedIn and Awareness-, Consideration- or Conversion Campaigns) can get me there best?
So step one is to identify the platform(s).
Step two is to identify the campaign type(s).
Once those two have been defined, you can go on and ask yourself what KPIs (Key Performance Indicator) will have to be monitored to assess the performance of your campaign.
Defining KPIs
For example, let’s say that you have defined your goal as having more traffic come to your website as quickly as possible. One of the best platforms for this is Facebook with its Traffic campaign type.
The KPI you will monitor for this, is the number of “Landing Page Views” or more specifically the “Cost per Landing Page View” as it will tell you how many users are actually arriving on your website and how many users you will be able to send to it through your advertising budget.
Performance Calculation and Prediction
So here is where the mathematical calculation comes into play:
You would take your monthly (or daily) budget of let’s say €500 and divide it by the Cost per Landing Page View metric. An average value for the Cost per Landing Page View metric is between €0,30 and €0,70. For this calculation, we’ll take something in between, namely €0,50.
The calculation goes than as follows:
€500 (monthly budget) divided by €0,50 (Cost per Landing Page View) equals 1.000 Landing page views.
So there we have it: 1.000 Landing Page views.
Now: Is this something you would be happy with? Would this bring you near your goal? Then go for it.
Making Adjustments to your Calculations
On the other side: Are you unhappy with these potential result?
Would you like for example to reduce the Cost per Landing View metric from €0,50 to €0,30 by showing the audience first some Reach ads or by using better ad assets?
Then go ahead and add this to your calculation as well.
BONUS TIP:
Visual Aids and Funnel Simulators
If you are more of a visual type of person or want to calculate extensively from beginning to end, it helps to use an excel file or sheets to represent the various campaigns, budgets and KPIs.
There are also marketing funnel simulators around like geru.com where you can easily create your funnel.
Conclusion
If you are not working with online ads on a day-to-day basis, it can be hard to know the potential and average metrics for each KPI of your online advertising campaign.
Nevertheless we invite you to invest in ads with a systematic approach and to run the numbers before setting them live.
Do you have another way of making performance prediction for your campaign?
Would you add any steps?
Then let us know in the comment section below!
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