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BizReport : Advertising : December 24, 2013

Why CPAs are more important than CPMs

Marketers can't forget about traditional high-yield ROI channels like the phone that are statistically more likely to drive conversions. As we move into 2014, marketers need to focus on driving results and figuring out exactly what strategies and channels drive conversions. Often marketers are distracted by the newest shiny tool in the toolbox, but they can't ignore traditional channels that truly drive conversions.

by Kristina Knight

Kristina: Is the CPM still a needed metric?

Eric Holmen, Invoca CMO: CPM is a useful metric for advertisers, as it allows them to get a glimpse of just how many people are viewing their ad. But increasingly, marketers will see CPM as supplemental to cost-per-action (CPA). Advertisements are meant to raise awareness of a brand but also include some sort of call to action. CPM excels at the awareness factor, but doesn't necessarily measure the action component. Rather than getting rid of CPM all together, marketers need to focus on adding other metrics, like CPA, to understand the full effect their ads have and improve services for future campaigns.

Kristina: How can brands make the strategy switch from focusing on CPMs to drive CPAs?

Eric: Bottom line: CPA is what drives ROI. Brands can still use CPM, but should consider it as secondary to CPA. They should focus their strategy around using CPA to fully understand in what channel their customers are most receptive to messages (print, mobile, social, etc.), as well as what content produces the highest conversion rate. A quick look at marketing analytics across all channels can help marketers build the best strategy for each target market - one market might respond more favorably to outdoor advertising, while another might convert through mobile ads more frequently. Using these metrics, marketers can test the campaign's performance and regroup on where to most effectively spend their budget.

Tags: ad measurement trends, advertising measurement, advertising trends, CPA trends, CPM trends, Invoca, online advertising

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