I get strange looks when I tell advertisers that switching from an awareness objective to a direct response objective requires a complete replanning of a digital campaign. While many advertisers understand why this is, there are many more who don’t.
Changes in objectives can happen for a variety of reasons. Sometimes, advertisers focus on metrics that aren’t compatible with the campaign objective, simply because response metrics are easily obtained. In other cases, marketing objectives might shift and advertisers erroneously believe they can simply swap creative to efficiently garner clicks. Whatever the case, there are three solid reasons why, when objectives are moved from DR to awareness (or vice versa), the agency needs to replan and re-quote fees.
Awareness campaigns are characterized by running in environments that are high-profile or selected due to appropriate context. In other words, many of the placements will command a premium. In such cases, CPM is the dominant pricing model. While other pricing models can play a role on an awareness campaign, generally your first digital ad dollars are going to go toward placements that are priced on a CPM basis.
DR campaigns tend to use a combination of pricing models. Depending on the advertiser, there may be a mixture of CPM, Cost Per Click (CPC) or Cost Per Action/Acquisition (CPA) price models. Hardcore DR campaigns tend to allocate more ad dollars toward the CPC and CPA end of the spectrum, but let’s take a look at the CPM ranges, so that we can compare apples to apples.
Your highly-relevant environments can sell for anywhere from single-digit CPMs to, in the case of micro-targeted standalone e-mails, a couple hundred dollars. To be fair and to keep the math easy, let’s assume $10 CPM. Let’s further assume that a highly-relevant environment and some stellar creative garners a 0.4% CTR in those environments. (This is many times the industry average, so I’m being generous here.) A ten-dollar spend would net you four clicks, for a CPC of $2.50.
A CPM that might appear on a DR plan might be a fraction of $1. Twenty-five cents is certainly do-able. And achieving a 0.1% CTR with such ads isn’t out of the question, even without optimization. In this case, a ten-dollar spend only gets you a single click, but it only cost you a quarter. So your CPC is $0.25.
Notice that we haven’t even delved into more efficient pricing models or invested a dime in campaign optimization, and already my cost to get a single click is ten times higher by using inventory originally meant to address an awareness objective. So if you’re entertaining this idea, know that you’re going into it with the numbers working against you. It’s highly likely that you’ll fail. By a factor of 10.
Awareness campaigns and direct response campaigns are designed from the ground up in completely different ways, and the planning process results in two plans that couldn’t be further apart in terms of their placement details. In fact, I’d go so far as to tell you to fire your agency if you change objectives and your agency contact wants to keep the plan intact without changes.
Awareness plans tend to place a lot of emphasis on proper environment. They’re typically willing to sacrifice response for reach to the right audience, and this means exercising a great deal of control over environment. On the other hand, DR campaigns have to balance three basic factors – Cost per action, volume of desired actions and editorial environment. As you can see in the chart I’ve included, exercising stringent controls over any two necessitates loosening the reins on the third. Most DR advertisers want control over volume and price and are willing to sacrifice some degree of control over the environment where their ads appear in order to do so. So you can see how planning for a DR goal leads a media team in the opposite direction than the direction they’d go for an awareness goal, and how the two plans can end up looking completely different.
Then there’s the notion of what’s required to keep awareness campaigns on track while they’re running, versus the needs of a DR campaign. The metrics that are indicative of DR success are almost immediately observable and actionable. Actions like clicks, web-based program enrollments or online sales are easily married by any standard adserver to the ad placements that referred them. In a worst-case scenario, a media team at an agency is working with results data that’s hours old.
Success measurement for most awareness campaigns tends to lag behind media delivery. That is, actionable awareness data might not be immediately available. So, even with tools like auto-optimizers, dynamic creative rotation and real-time bidding working for you, DR campaigns require more maintenance in order to continually improve performance. In general, when you compare agency staffing plans and costs from an awareness campaign to a DR campaign, you’ll see more agency resources being expended on campaign maintenance in a DR campaign. You may also see fewer hours being spent on upfront planning.
Shifting goals not only changes the nature of the campaign, it also changes the nature of the work that your agency is doing for you. That’s one big reason why it’s disruptive to change goals after the fact.
It’s Important to Understand One Another
When confronting a situation like a shift in objectives, many advertisers tend to think that if their ad campaign reaches the right audience, eliciting an action cost-effectively is a matter of simply changing creative. In reality, goals affect the structure of your digital campaign from a planning perspective. Just as switching to a DR objective would result in significant changes to allocations within your marketing plan, a goal change should trigger similar adjustments in your digital plan.
Don’t be taken by surprise when your agency indicates that changing objectives might require more time and effort than you initially thought.