In most industries, there is at least one metric used to track the success of an operation – whether it’s cost, time, material, or some combination of these four. In the world of marketing, however, there is no agreed-upon approach to defining and measuring success. That being said, there are several widely accepted methods of analyzing and evaluating marketing campaigns, and one of the most popular measurements is the number of ‘impressions’ or ‘viewers.’ In a nutshell, an impression is when an ad is shown to someone who might later become a customer, and a view is when someone actually looks at an ad or sends it to a friend for more information – whether or not that person ends up buying anything.
While there is certainly merit to measuring the success of a marketing campaign in terms of impressions or views, these numbers can be skewed by several factors. To account for this, we need to take a closer look at the ins and outs of rounding.
What Is Round?
Rounding is the process of dividing a number by a certain amount, and in this case, we are dividing an expense by a certain amount to obtain a ‘rounded’ cost estimate. To give an example, if you have an expense of $100 and you want to ‘round up’ to the nearest dollar, you would take $100 and add $1 so that the total becomes $101. In this case, you would say that the cost of the operation is $101 rather than $100.
One of the first questions you might ask is why would you ‘round up’? The answer is quite simply that you would ‘round up’ because you want to be sure you have coverage. A dollar is a small amount to lose, but it could also be the difference between success and failure. For instance, if you are running ads in a newspaper and your cost per impression (CPI) is $1, but your cost per view (CPG) is only 50 cents, you might find that you have spent more than you would have if you had kept the original figures. Essentially, you are trading off the ‘looks’ you get for free for the cost of getting them.
What Are The Pros And Cons Of Using Round On An Expense?
Before you begin your marketing campaign, you should consider all the pros and the cons of rounding your expenses. The main advantage of using round is that it makes your numbers more accessible. Someone who is not familiar with your industry might not know what a certain expense item is, but they will be able to understand what $0.75 or $1.50 is since it is a common amount for your industry. In many cases, this will even make your numbers more understandable to you as well since you will be able to identify specific costs associated with your campaign.
On the other hand, there are a few disadvantages to rounding your expenses. The first is that sometimes the client will accuse you of using tricks to get the numbers you report. If your boss washes his vegetables with Tabasco rather than salt, for example, you might not want to report that your costs are actually higher than you said they were since it is technically ‘fudging’ the numbers. A second disadvantage is that sometimes you will be tempted to ‘round up’ items that you should have ‘rounded down’ instead. If your cost per response (CPR) is $2.50 but you decide that you want to round it up to $3, you might end up with some unnecessary expense. Similarly, if you decide to round your cost per order (CPO) down to $5 instead of $6, you are likely to exceed your budget by $1. Even in these cases, you are better off rounding down rather than up since you can always go back and change your mind later if you decide that you want to add more money to a particular program.
When Should You Round Up?
When should you ‘round up’? Like many rules of thumb, there is no hard and fast answer to this question. Generally speaking, you should try to ‘round up’ whenever you can. One of the main reasons for this is simply that it makes your numbers more accessible to people – something we have already established is a plus.
Another reason for rounding is that it makes your numbers more accurate. When you come across a number that is slightly more than you would expect for a certain amount, you have to question whether or not you should round it up. If you decide to round it down, you might find that the amount is slightly incorrect and either have to go back and fix it or report it as an error. Rounding is generally a good thing, and for the reasons listed above, it is almost always a good idea.
When Should You Round Down?
When should you ‘round down’? Again, this is something you should decide based on the particulars of your situation rather than follow a hard and fast rule. In most industries, ‘rounding down’ is preferable to ‘rounding up’ since you are always guaranteed to be correct if you do this. In some cases, however, you might want to ‘round up’ rather than down. If your cost per unit (CPU) is $4.50 but you want to ‘round it down’ to $4, you might end up with some extra expense, but these are the kinds of things you should ask yourself before you decide to ‘round down’ rather than ‘round up.’
Another situation where you might want to ‘round down’ is if you are dealing with large numbers. If you have 200 units of equipment to purchase and the cost per piece is $100, it would be a little crazy to go ahead and purchase 200 pieces at that cost. In this case, you might want to ‘round down’ the cost to $20 or $25 so that you can make the purchase without breaking the bank.
What Is The Difference Between CPI And CPG?
A commonly used abbreviation in the world of marketing is CPI, and it stands for ‘cost per impression.’ Essentially, a CPI is the cost of obtaining one single impression – whether or not that impression leads to a conversion or is just an advertisement that someone later on ‘mentions’ or ‘gives’ to a friend. In most cases, a CPI will be very similar to the CPG, which is the cost per view. The main difference between the two is that a CPG also includes any possible conversions or leads that might have occurred as a result of the ad – whether or not it was intentional. In other words, a CPG takes into account any possible money that might have been made from the ad. Let’s say that you run a pharmaceutical company that promotes healthy living and regularly runs ads for its drugs in a popular magazine. One of these ads encourages people to call a certain number and ask for a free consultation with a doctor. During this time, you get a few calls, but only two of those who call actually qualify for the free consultation and buy a $5,000 medication as a result of the ad.
In this case, you would report both a CPI ($5) and a CPG ($10) for the ad since it achieved its goal of prompting a call. You might also report a further CPG ($15) for the medication since it generated two sales.
What Is A Success Score?
After you have defined the metrics for your campaign and tracked its progress, you might decide that it is time to calculate a ‘success score.’ To give an example, if your goal is to double the amount of people who purchase a certain product and you have tracked this to be the case, you might say that the effectiveness of your campaign has been ‘successful.’ In many cases, this will be a simple matter of dividing the amount you want to have happen by the amount you have actually had happen. In the case of our fictitious pharmaceutical company, we would say that their ad was successful because they achieved their goal of doubling the amount of people who called and obtained a free consultation. In some cases, you might want to express this as a percentage and say that their ad was 30% successful.
What Is A Re-engagement Score?
After your initial engagement with a customer, you might decide that it is time to measure the ‘re-engagement’ of that person. This might be done by either re-mailing the person who earlier in the ad campaign expressed interest in your product or by giving them something for free that you hope they will remember you for. Another approach would be to put an offer in the mail that they can’t refuse – like a coupon for 20% off their next order or a free t-shirt with their name on it – just to see if they will come back.