How to Audit Banner Advertising Campaigns and Negotiate Better Pricing

March 20th, 2011

Campaign AuditJust a few months ago, a client of mine entered in an agreement to serve banner ads on a technology social network. It is a reputable and popular network- the target audience was a great match and they had tons of traffic. The banners ads are served on the publishers own ad server platform and priced by CPM.

After the three month campaign has run it’s course, the sales rep for the publishers site followed up with reported numbers (clicks and impressions) and he also raved about how good the click through rates were and that they also threw in a good chunk of extra impressions. This was his email:

“I’m pleased to report that the campaign delivered in full (actually, we ran 250,000 bonus impressions in November as well!). Overall, your campaign outperformed our online average of 0.13% by 77% with a CTR of 0.23%! We sent 6,408 visitors to your website during the campaign. I’d love to discuss future opportunities with you. Please let me know if you have some time this week to discuss further.”

I’m going to bet that some marketers may get caught up in the generosity and respond back to above sales rep like so:

“Why heck, let’s run another campaign then – thanks for the extra impressions, can you throw in some more for our next campaigns if we commit for another 3 months?”

Or a more “quasi data-driven online marketer” would say:

“Let me get back to you, I want to check the referral traffic and evaluate the conversions from the campaign(s)”

Or to take it up yet another notch, a “more advanced data-driven marketer” would say:

“Let me get back to you, we want to evaluate conversions as well as audit the numbers you have reported against our own campaign tracking.”

If you have campaign tracking in place for any banner advertising, I challenge you to be the “advanced data-driven marketer”.

Ps. If you don’t know what I am talking about using campaigns tracking in Google Analytics, read this page.

So. let’s get to the meat…

I am going to share with you steps that I did to audit the banner advertising for my client and share with you how it can help with negotiating better pricing in the future.

Step 1 – Always Have UTM Tracking in Place.

The most important thing is to make sure you have tracking appended to your urls on your banner campaign(s). You can generate your utm urls with Google URLs Builder. I personally like to use a spreadsheet with formulas to generate and document all campaign tracking (as well as ad spend). This comes in handy if you have a few members in the marketing team, you just need to train them how to tag every campaign pointing into your website.

This is a snapshot of a Google doc I like to use for documenting all campaign tracking:

utm generation in google docs

Why use Google UTM tracking?

With UTM tracking, you can segment out specific reports to see what outcomes a particular campaign brought in and also help you formulate your return on ad spend. If you don’t use UTM tracking, you may have other traffic from the site (free links that are ongoing) or multiple campaigns and the data would be all aggregated. The data aggregated from the referral source may not give you correct insights for your return on ad spend and what campaigns may be working or not.

Step 2 – Export Your Campaign Data from Google Analytics into Spreadsheet.

Export your Google Analytics visits and conversions (for the same reported time frame that the publisher has used) into your spreadsheet to compare it with publishers reported data.

Step 3 – Uncover and Understand Your Discrepancies.

This is where the golden nugget may reside. If you see huge discrepancies between the publishers reported clicks and your campaign tracking visits in Google Analytics, then you may have discovered something that can help you with negotiations for future advertising with the publisher.

reported clicks vs actual clicks

Keep in mind that NO two reporting systems are going to give you the exact same data/metric numbers. If you see a + or – 10% difference, that may be ok.  But in the case above, it was almost double. That is a red flag to me as being inflated numbers (intentional or non-intentional – I cannot make judgment on that though).

If you see such a discrepancy, question the data from your publisher. In this case I  asked the publishers rep for clarification of their report (specifically what was their definition of clicks and if he knows why there is such a discrepancy). Unfortunately he couldn’t give an accurate answer, but he acknowledged that their numbers “may” be factoring in visits from robot/crawlers visits (not human beings).

This big discrepancy may be a by-product of server side tracking software that the publisher is using for their ad serving reports. Google Analytics is client side tracking and is more accurate. This  discrepancy leaves me to conclude that the publishers report was well inflated (not intended though – I will give them the benefit of the doubt).

Step 4 – Calculate Cost Per Visitor and Cost Per Conversion
.

If you find a discrepancy like I did above, use your Google Analytics tracking data for visits (do not use the publishers clicks). Then calculate the campaigns cost per visitor and cost per conversion with your ad spend like so:

campaign costs

Step 5 – Compare Data to Similar Campaigns.

Benchmark and look at similar campaigns that you have run. Does the cost per visitor and cost per conversion stack up fairly when compared to other similar campaigns?

For this campaign (C) I am thinking it is not stacking up and not competitive ad pricing, when I compare it to similar campaigns:

campaign comparison

Note: if I had used the publishers visit count, the campaign would actually have worse conversion rates and higher ad spend per visitor and per conversion!

Step 6 – Compare the Campaign to Similar Campaigns. Figure Out Your Ideal Ad Spend Per Visitor or Ad Spend Per Conversion

For this step, you are comparing your campaign to other campaigns and figuring out what is your ideal ad spend per visitor or ad spend per conversion (if the campaign pricing is not competitive).

Say I want to get pricing that is more aligned with my other publishers, for example I may think $1.75 ad spend per visitor is fair enough to ask for:

Expected ad spend per visitor

Step 7 – Converting Your Ideal Ad Spend Per Visitor Back into CPM

If I wanted the publisher to be at around $1.75 per visitor ad spend,  I now have to convert back my thinking into their CPM pricing model.

CPM (Cost per thousand impressions) oh how much I dislike you. So old school.

Here’s my expected per visitor ad spend:

$1.75 per visitor
12.80% conversion rate
budget of $4500

Then I would convert above, like so:

  • 2571 visitors(based on budget of $4500 and per visitor cost of $1.75)
  • 329 conversions (based on the 12.80% conversion rate of those visits)
  • 1,117,800 Impressions (based on CTR 0f 0.23% of impressions reported from the publisher and the expected 2571 visits)
  • $4.02 /cpm pricing

Tool tip:  use this CPM calculator by typing in your budget and expected impressions.

Instead of the original $5.00/cpm that was being charged,  this audit uncovered a $4.02/cpm to reach the expected $1.75 per visitor ad spend. This change in pricing would bring 148 more conversions with same budget!

Once you have your final expected numbers, ask the publisher for more competitive pricing. If they cannot accommodate your request, you may want to reallocate the funds to better performing campaigns for your business.

For this particular publisher, after we shared the discrepancies and expected CPM pricing , we received an email back stating:

“Thanks so much for the additional information you provided. I’m happy to revisit pricing for future campaigns to bring our results more in line with other campaigns you are running. I look forward to hearing from you regarding your future advertising plans. Do you have an idea of next steps?”

The email above is music to my ears.

My clients marketing budget may bring them more leads in the end and I feel I have done a good job being a web analyst!

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4 Responses to “How to Audit Banner Advertising Campaigns and Negotiate Better Pricing”

  1. Iman on March 22, 2011 11:07 pm

    Your blog is great! Thanks for the great post, I should confess that I had to go over some technical stuff two three times to understand what exactly you are talking about, but it’s definitely one of the best technical blogs out there. Keep up the good work :)

  2. Rob Matysiak on May 27, 2011 8:15 am

    Interesting points. Never thought to export Google Data to a spreadsheet. What a great idea. Helped me a lot. I’ll come back for more tips.
    Thanks

  3. Online Marketing on July 30, 2011 10:57 pm

    Hi,

    Very descriptive presentation using snapshots……..

    Thanks,

  4. Karthik on June 6, 2012 5:57 am

    It helped me a lot .Great explanation .Thank you very much .

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