Digital Marketing 101

Pillars of Paid Digital Marketing

The product itself is the foundation of this digital marketing temple. Even if our foundation is strong, we cannot move directly to decorating the interior as we need to build the pillars. The pillars are the components of the paid digital marketing strategy.

Data

For the first pillar, if there was the one pillar to rule them all, data would be it. This is also the area that makes traditional marketing the pug to the digital marketing greyhound, as data is more instantaneous and the more precise nature in comparison.

One of the reasons why it is more precise and instantaneous is due to pixels. What are pixels? Pixels are snippets of code that allow you to store valuable information about the users who triggered the code and send that information to ad platforms to utilize. They can track where a user is within the funnel, including if the user has accomplished the final goal of a conversion, based on interactions with the website.

With this information, the data from the pixel is not just important in analyzing whether a marketing campaign was successful or not, but also important in building audiences in relation to the funnel. This is a key part in the digital marketing strategy.

Other data in relation to the funnel that’s useful in building audiences is the data that users directly provide to you through newsletter signups, account creations, or other lead forms, which shows a high level of intent. When gathering this data, you should make sure there is a unique identifier for the user; most often an email address is used.

Before we end talking about this pillar, there is one elephant in the room that needs to be discussed. That matter is privacy. In order to be conscious of data privacy, privacy laws must be followed where applicable and allow users the option to opt out.

Targeting

With the first pillar discussed, we can move on to the second pillar: targeting. Targeting can be both used to exclude or include audiences within a campaign. I like to group targeting into two separate groups: universal and funnel specific.

For universal targeting, the levers you can pull are about your product in general and can be applied regardless of where a user is within the funnel. The most significant targeting are:

• Geographic Targeting
• Even if you are only within a specific country, there can be states, provinces, cities that have higher success
• Device
• This can also be considered a funnel specific target; however, research has shown that mobile usage is actually universal within the purchase cycle, according to Marketing Land
• Ad Platform Placement
• Depending on the ad platform, there are different placements that they can serve.

For funnel specific, the levers utilized exist within the silos of the funnels. As a result, we’ll discuss them within each funnel state.

Remembering back to the funnel, of the five funnel states, the first state is awareness. Within awareness, we actually don’t know much about the user, as they haven’t landed on the website for the pixel to get any data about the user. We do, however, have “data” on our product itself, which can help narrow down the pool. In addition, many platforms have information about their users that they use to optimize the campaigns themselves (sometimes even better than ourselves who knows the product the most).

In summary:

• Broad
• The ad platforms themselves can optimize for users who are more likely to become aware and consider a product
• Interest
• These can be defined by keywords or lists of interest that the ad platform curates

Once a user has passed the awareness state and then successfully moved into consideration, if we have a pixel or any other way to provide that data connection between the user, the website, and the ad platform, we can move into retargeting.

• Website behavior - Page Visit (pixel)

The third layer of the funnel are users who have shown intent by interacting with the website in one way or another and are one layer away from conversions. Interaction with this layer is again due to pixels and user provided data:

• Website Behavior (pixel)
• A great example are users who interacted with the cart, but abandoned the journey.
• Email Custom Audience
• If a user provides their email (or other information) and allows the use of it in marketing, this shows a high level of intent. We can then provide this information to the ad platforms, which can map it to their list of users.

The funnel and audience combination often guide campaign structures within each platform.

(Fig 2: A summary of what targeting to use at each layer of the marketing funnel)

Bids & Buys

Moving to the third pillar, we enter the world where we actually place an order for the ad placements based on the targeting we set and based on the data we currently have. In order to place ads based on the targeting, there are two methods: direct buys and auction buys.

In an auction buy, advertisers trying to buy the same placement are pitted against each other based on their bid. The highest bidder wins...sometimes. There are a few nuances and it’s usually centered around the fact that the ad platforms themselves need to have a strong foundation - a strong product. In order to ensure they maintain a level of quality, there are benefits that the ad platforms give to ads that show high relevance with their creative and/or landing page. There are some other quality metrics that ad platforms look into as well, such as site speed and more.

There’s another layer of complexity, as there are different bidding solutions. The main three are Cost per Click (CPC), Cost per Acquisition (CPA), and Cost per Thousand Impression (CPM). Using CPA bids typically means less control and more automation. If the ad platform's machine learning is trustworthy, this also typically means that it is likely the most efficient in getting the goal conversion. CPM is great in increasing awareness with a high level of reach and impressions, but definitely less effective in getting a cheap cost per acquisition. In the middle there is CPC, which allows you to control how you are spending. Since you’re paying based on clicks, there is at least a layer of intent that you are paying for.

With direct buys, the purchase is made usually directly with the website (publisher). Typically this is made with a set budget and you should receive a goal CPM. The benefits of this type of buy means you are not going to be competing for a placement and guaranteed placement; however, this does mean that you are committed to a single bulk purchase, which reduces the flexibility of your budget.

If there’s any confusion on the jargon, fear not, as we’ll be going over some of the terms later on in this post.

Creative & Landing Page

Creative - ad image and ad copy - is important in all stages of the funnel and the landing page is key in the consideration and future steps of the funnel.

For best practice, keep the creative and landing pages pertinent to where a user is within the funnel and related to the targeting used to lead them there.

Other best practices is to make it clear what a user should do with clear Call to Action.

Metrics

In this section, I’ll cover the definitions of each metric and how they interact with each.

(Fig 3: Flow of volume based metrics)

**Impressions:** Number times the ad is rendered/viewed on a screen to a user.

**Reach:** Number of unique users who saw an ad.

**Click:** Number of clicks on an ad. (Unique Clicks de-duplicates users)

**Conversion:** Number of completed desired goal. This can be tied to the click, impression/view or both.

**View-Through Conversion:** Number of completed desired goal tied to the view but did not click.

**Life-time Value (LTV):** Total amount of revenue a customer is expected to provide during their lifetime.

**Frequency:** Average number of times an ad was seen by a user. *Calculation: Impressions ÷ Reach*

**Click Through Rate (CTR):** Rate at which users click a view ad. Often used to determine effectiveness of ad copy and ad assets. *Calculation: Clicks ÷ Impressions*

**Conversion Rate (CVR):** Rate at which users complete a conversion per landing page visit from an ad. Often used to determine effectiveness of audience quality, website design, and more. *Calculation: Conversions ÷ Clicks*

**Average Order Value (AOV):** The average value of an order *Calculation: Revenue ÷ Conversions*

**Cost per Acquisition (CPA):** Cost to acquire a user. If we did not account for LTV, this amount should not exceed AOV in order to make a profit. *Calculation: Cost ÷ Conversions*

**Cost Per Click (CPC):** Price you actually pay per click. *Calculation: Cost ÷ Clicks*

**Cost per Thousand Impressions (CPM):** Price to acquire a thousand impressions. *Calculation: Cost ÷ Impression x 1000*

**Revenue On Ad Spend (ROAS):** Measure revenue per amount spent on an ad. A value of 1 would be the equivalent of breaking even. *Calculation: Revenue ÷ Cost*

**Return on Investment (ROI):** Measures profit attributable to marketing. *Calculation: Revenue ÷ Cost - 1*

**Ad Yield:** This is a non-traditional term. It is used to determine if the ad copy or image asset had an effect further down the line with relation to the landing page *Calculation: Conversions ÷ Impression*