One effective way to maximize your ad spend is through ad tracking. Ad tracking enables you to assess the performance of your online ad campaigns. It also grants you access to lots of data you can leverage to provide improved user experience.

Interested in learning how ad tracking works? This article gives insights into the various ad tracking tools and platforms available. You will also learn how to define performance metrics for your online ads, set measurable goals and analyze success.

What’s Ad Tracking?

Ad tracking is the process of collecting data, including user insights. This data is usually on the performance of your online advertising campaigns. This activity enables you to access useful information on user browsing behavior. The information gathered can guide you to create relevant ads that engage and interest your audience. So, ad tracking provides you with insights on how your target audience interacts with your online marketing campaigns.

Ad tracking is one major advantage that comes with online advertising. Traditional advertising channels include the newspaper, radio and television. These channels don’t give advertisers accurate insights into how people interact with their ads. For example, it’s impossible to track how many people engage with a newspaper or television ad. It’s also very difficult to know how many people actually bought a product or service because of the ad.

This challenge makes it difficult to accurately measure the success of an advertising campaign. As a result, it becomes even more difficult to calculate the ROI (return on investment) of such marketing efforts.

Online advertising platforms like Google and social media have changed the narrative. By setting up an ad campaign, advertisers now have access to a pool of tracking data for each campaign they run. This data can be incredibly overwhelming. For example, you can collect lots of data on several metrics. This can include views, clicks, and impressions that your ads generate.

You shouldn’t allow the enormity of the data you receive to distract you from your marketing goal. One way to stay focused is by determining the specific key performance indicators (KPIs) that matter to your bottom line.

Defining Key Performance Indicators For Your Campaign

Determining specific KPIs is critical to the success of any online advertising campaign. Good KPIs are not financial in nature. They’re marketing metrics that represent key behaviors you want to influence in your audience.

Your KP1s will change as you transition from one stage of the marketing funnel to another. There are three distinct stages in a typical marketing funnel. They are:

  • Top of the funnel
  • Middle of the funnel
  • Bottom of the funnel

1. The top of the funnel

This is also known as the awareness stage. This is the first point of contact with prospects. Prospects at this stage are either seeking information or looking for answers to certain problems. Relevant metrics at this stage include:

New site visitors: The number of people that visit your site after launching a campaign. This metric helps you gauge the success rate of your campaign in increasing brand recognition.

Engagement: Engagement is measured by the amount of time visitors spend on your site. This includes the number of pages they view. This helps you determine the quality of the new traffic to your site. It also provides useful insights such as new visitors’ bounce rate. You may have to adjust your strategy if their bounce rate is high.

2. Middle of the funnel

This is known as the consideration stage. Prospects are already aware of your brand. This is where they compare your offerings to those of your competitors. They decide whether your product or service is right for them or not.

Here are some KPIs you may have to focus on at this stage:

Number of conversions: This refers to the total number of conversions that your campaign generates. You can retarget them to convince them to convert. You can also adjust your campaign based on their response.

View-through conversions (VTC): These are conversions that result from customers who view particular ads but do not click. These people influence conversions even though they refuse to click.

Closed deals and new sales: You may want to know the total number of deals closed from prospects that interact with your ads. There are also some insights that can be important. These can include the quality of deals closed and new sales that come from your ongoing campaign.

Cost-per-acquisition (CPA): This is the total cost to gain a new customer. Your CPA is determined by dividing your campaign spend by the total number of conversions. This indicator helps you learn how effective your teams are at closing, retaining and cultivating customers.

3. Bottom of the funnel

The bottom of the funnel is the decision stage. Prospects are deciding from whom they want to buy. Metrics from this stage help you to determine the ultimate revenue consequences of your marketing efforts.

Return on Investment (ROI): Your ROI is the net profit your campaign generates. It’s the difference between the total revenue your campaign generates and the total cost of running the campaign.

Lifetime Value (LTV): This refers to the net profit you make from a customer over their lifetime. This indicator is relevant as it helps you to calculate your ROI over time.

Common Ad Tracking Methods

Now that you know the various KPIs you can track, the next thing you might want to learn is how to track ads. There are three common ad tracking methods. These tracking methods vary, based on where you’re running your ads and the tools you’re using.

The ad tracking methods you’re about to learn are not mutually exclusive. Combining various methods in the right way can provide more powerful insights for a successful campaign.

Tracking URLs

A tracking URL is a standard page URL from your website with a tracking token added to the end of it. This extra token is known as a UTM parameter. Tracking URLs enable you to track audience’s behavior on your site. This is how it works:

When a user clicks on a URL that has a tracking token, it sends a signal to your ad tracking tool to inform you that the URL was clicked. The signal can supply useful data such as the location of the user.

What if you’re running the same ad on several websites? Tracking URLs can help you know which one generates the most clicks. You can do this by defining the separate websites as sources in the UTM parameters of your links.

Tracking URLs are effective if you’re running a PPC campaign. They’re also effective if you’re sending emails or putting ads on another website. It’s also ideal for calculating the number of visits, clicks, leads and conversions your campaign generates.

Tracking Pixels

A tracking pixel is an effective way to gain insights into user behavior with your ads. It’s a tiny and transparent 1px by 1px image that can be integrated in a digital ad, email or a webpage. When a user views your ad or visits your website, the pixel loads and sends back a signal to your ad tracking tool that someone has interacted with your ad.

Tracking pixels provide a large pool of data about a user and their activity. The data can be so overwhelming that you may get lost in a sea of data. So, it’s important you focus only on relevant information that’s directly useful to you. It should help you create a more personalized experience for your target audience.

The insights you gain from tracking pixels can help you optimize your ads. For example, you can track the number of people that view your ad against those that click on it. You can also track how users navigate across your website and the pages they view. These insights can help you determine whether your campaign is successful.

Cookies

Cookies are usually used on websites to create a customized user experience. They help you gain insight into the user’s behavior on your website. Businesses usually have to get users’ consent before tracking their activities. Once the consent is granted, their data is used to customize their experience.

Cookies are especially useful in retargeting campaigns. Cookies enable you to build a user profile based off their web activity and browsing habits. The user profile can be used to create relevant ads that align with the interest of the user.

Cookies are a viable option for you if you intend to serve a user ads that align with their web browsing history. It’s also ideal for a retargeting campaign. Cookies are generally useful if you want to gain valuable insights. These can help you create a personalized experience for users on your website.

Major Ad-Tracking Platforms

Google Ad Tracking

Google is a leading platform where businesses advertise their products and services. The journey started in 2008 when the company acquired a tech startup known as DoubleClick. DoubleClick is an ad management and ad serving platform. It enables advertisers to run ad campaigns across several channels.

In 2012, Google rebranded their DoubleClick products. They were then known as Google Marketing Platforms, Google Ads, and Google Ad Manager. Google Ads was formerly known as Google Adwords. It’s an advertising platform. Advertisers bid for keywords to have their ads displayed on Google’s first page.

The tech giant offers you different ad tracking options when you run ad campaigns on the platform. Most of these options use cookies. Information associated with cookies used in advertising can be added to the user’s Google account. But, this depends on the publisher’s and user’s settings.

Cookies generally collect data on the time and date a user views a particular ads. It also supplies other relevant information. This includes specific web pages where an ad is displayed, the user’s IP address, and more. These pieces of information help to track the user’s interaction with your campaign.

Google uses two main types of cookies:

  • First-party cookies
  • Third-party cookies

First-party cookies refer to the ones that are designed for a specific user by the owner of the website. The cookies help you collect data that enables you to understand the activity of the user on your website as well as your ad performance.

Third-party cookies are used by advertisers that are promoting across several channels. The cookies send back information to you about the performance of your ads across the websites.

Google runs adverts across millions of websites. The integration of cookies to these websites yields a rich pool of data for Google advertisers. They can easily keep track of what ads their target audience is served. Then, they can determine the effectiveness of their marketing campaigns.

It’s easy to get started tracking ads with Google. You can create your account on Google Marketing Platform. There are two types of accounts: enterprise account and a small business account. The type of account you create depends on the size of your business and your specific needs. An enterprise account, for example, is designed for large ad campaigns across several channels. A small business account is suitable for startups.

Facebook Ad Tracking

Ad-tracking becomes much easier with Facebook. The social media company offers you several tracking strategies to optimize your ads. One of the common methods to track ads on Facebook is through ad tracking pixel.

Facebook’s ad tracking works like the regular tracking pixel discussed earlier. When a user takes an action on a page with a tracking pixel the pixel sends back a signal to your Facebook Events Manager Account. The information collected can be used to create a personalized experience for the user.

This tool helps you track user’s activities. For example, it can help you track the pathway a user takes from the time they first view your ad to when they finally buy a product. Generally, a tracking pixel offers you valuable insights. Especially on how your ads are influencing specific actions on your websites.

Another ad-tracking option on Facebook is adding a tracking token or UTM parameter to your ad links. This also works like the tracking URLs discussed before. You use tracking URLs in Facebook Ads Manager to understand the amount of traffic each of the ads you’re running is driving.

The Benefits Of Ad Tracking To Your Business

  1. It provides meaningful insights into audience behavior

You should have an idea of who your audience is before setting up a campaign. But you can’t say how they will interact with your ad. Ad tracking provides meaningful insights into their behaviors that are critical to your campaign.

Ad tracking gives you an in-depth look at their profile. This enables you to know more about their interests. It also provides insights into their engagement, behavior, and buying habits.

  1. It provides your audience with a more personalized experience

You can then leverage the information you’ve collected via ad tracking to create relevant ads that resonate with your audience. When you base your ads off users’ behaviors, it helps you to deliver a more personalized ad experience.

An ad tracking method, like cookies, creates an excellent retargeting opportunity. This helps you serve relevant ad content to users who have interacted with your brand before.

  1. It guarantees a better ROI

You want to know how much comes back to you after investing in digital advertising. Ad-tracking, if done well, can significantly boost your return on investment. Ad tracking guides you, so you know which of your strategies is working and which is not. This enables you to make adjustments where necessary. So, you can influence positive behavior from your prospects.

You’re more likely to earn higher conversions when you deliver a better ad experience. The higher your conversions, the better ROI for your business. This is why ad tracking should be an important part of your business. It removes the guesswork and gives you valuable data to work with.

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