PPC, KPI, if you’re thinking of hiring someone to help market your accounting firm, you might have heard these terms. But what do they mean? There’s no reason for an accountant to find them intimidating because they’re all based on math. Each of them tells a story about how your website and marketing efforts are producing results.
Learning the basics of these terms, and how to interpret them, will help you make budgeting decisions for future marketing pushes. It also gives you a way to evaluate which ads, blog posts, or SEO efforts have connected best with target customers. Looking back on your social media marketing maps out a better path forward.
The reality is that while the internet and social media marketing appear to be free, it’s not. You will have to dedicate resources to advertising online, so you should know how to tell if you’re receiving a return on that investment.
PPC
PPC stands for pay-per-click, and it refers to when a company places advertising on a website and then pays the website owner “per click” through the ad. You might also see it referred to as CPC or cost per click.
You’ll hear it when discussing search engine advertising, where you bid to appear in the advertised results at the top or right of the screen. When someone enters a search term into Google, the search engine goes through all of the companies that have bid on that term. Google’s algorithm will look at the keywords used, the money the advertiser has bid, and the quality of the ad’s landing page when determining which ads to return in search results.
PPC can vary widely, depending on the keyword value and competition. You could pay $3 for a click, but if that click turns into $400 of business, it’s worth it.
CPI
You also might have to pay just for a target customer to see your company, ad, or social media post. This is your cost per impression or how much it cost you to put yourself in front of your audience. It builds reach and brand awareness, which eventually lead to sales.
To calculate this metric, take the total cost of your advertising and divide it by the number of impressions. To get the cost per mille, or cost for reaching a thousand impressions, multiply that number by 1,000.
If you are trying to gauge the effectiveness of one social media post versus another, this is a good metric. If one ad cost 0.50 to get in front of each person it reached, and another 0.30, look at what made the one ad more effective (cheaper) than the other. Then, try to replicate this in your next ad campaign.
CTR
Let’s say you tweeted out a link to your latest blog post. What’s your CTR? Click-thru rate goes a step further than CPI, telling you how many of the people who saw your post clicked through it. While CPI tells you who saw your ad, tweet, or Instagram post, CTR tells you if it interested them enough for them to click.
Calculate the click-thru rate by taking clicks and dividing it by times it was seen. Again, comparing the CTR between two posts can lead to further information about what interests your target audience, which social media platform they prefer to interact on, and if the language of your social media posts is effective.
Engagement Rate
While sometimes used interchangeably with CTR, your engagement rate applies more to social media posts where there is nothing to click. This could be a “like” on Facebook or Instagram. In addition to how many people see your post, how many interact with it? That’s your engagement rate.
Take your interaction with a post – the number of likes, shares, and comments – and divide it by the number of your followers to get your engagement rate. For example, if an Instagram post has 300 engagements, and your account has 15,000 followers, your engagement rate is only 2%. What is considered “good” will depend upon your industry and the social media platform.
CPA
This metric is relevant to both social media and your business in general. CPA, or cost per acquisition, tells you how much it costs to gain a new customer.
Get it by dividing your campaign’s total cost by the number of conversions. Online, measure a conversion by a sale, and Google Analytics will give you this percent in their reports. Offline, you could think of conversions as the number of new clients who have come to your business from online marketing efforts. Consider adding a “how did you hear of us?” question to your website contact forms or asking during an initial meeting to help gather this information.
KPI
Overarching all of these terms is KPI or key performance indicators. This refers to which of the metrics on the above list you have decided are important to your business. Your KPI will relate to the goals that you’ve set for your social media and digital marketing campaigns.
Is your goal to drive traffic to your website? Then CTR and CPC might matter more than impressions. Are you just trying to build brand awareness? You might put CPI higher on your list of KPI.
While these terms may be unfamiliar, they should not be intimidating. They are all numerical representations of effectiveness, similar to ROI in the accounting world. If you don’t want to handle your online marketing yourself, however, and have no clue how to optimize a landing page to rank better in Google’s search results, consider reaching out to CPA Gardens. We provide stunning websites and strategic marketing services guaranteed to produce results.