Hard to believe, but it’s already time for retailers to begin solidifying their content, promotion and media strategies for two of the biggest retailer seasons of the year – Back to School and the holiday season. As reported by Shop.org’s recent Back to School consumer survey, close to one third of consumers have already started their back to school research and another half are kicking them off now.
To feel confident that retailers are putting their best foot forward in their ads and learning the most from their ad testing, they should be sure they are looking at the most powerful metrics.
Click-through rate (CTR) is good, but it’s only part of the story and can provide more confusion than clarity when analyzed next to other key performance metrics (see example above). For years, Adlucent has claimed that gross profit per impression (GPI), calculated as (revenue – ad spend)/impressions, provides a more accurate measurement of ad text performance and strategy than simply looking at CTR. GPI measures the value of every single impression driven via an ad. In a testing scenario, this is very powerful in determining which ad to choose and how to optimize.
Adlucent clients experienced a 27% increase in YoY GPI in Q2 and will use it heavily in helping capitalize on Back to School and holiday shopping in Q3 and Q4. With smart management, this guidance should enable retailers to simply pull the traffic lever and increase their overall revenue/profitability.