Let’s talk about key performance indicators. They can be great tools for evaluating campaign performance in today’s data-driven world, but they can also be tricky. KPIs can’t give you the right answers if you don’t properly align them to a strategy, and can be downright deceiving if you discount disappointing metrics without considering a campaign’s big picture.
The work we’ve done with the premier off-price eCommerce portfolio company Rue Gilt Groupe (RGG) helps illustrate these points quite nicely.
RGG uses our email exchange to drive quality traffic to the websites of its Rue La La and Gilt brands. When readers click on RGG ads in email newsletters, they are directed to landing pages that immediately ask for their email address before they can browse the sites.
A while back, RGG was running a campaign with a KPI that didn’t match its approach. The effort was optimizing toward email sign-ups, an upper-funnel action. RGG, however, was using a lower-funnel KPI to measure success: return on ad spend (ROAS) based on new member revenue.
To remedy the mismatch, RGG manually tied purchase data to our domain-level exposure data. They opted to push more spend to publishers that were driving the highest performance in terms of member purchases. The solution worked but was clunky, time-consuming and, truth be told, likely imperfect given the zigzag of customer journeys.
A more elegant approach
In early 2020, we proposed a new strategy: using a lower-funnel signal to inform the optimization algorithm and more efficiently connect the dots to ROAS. By including a pixel on the “Add to Cart” pages, the campaigns could optimize based on users who were adding items to their carts.
Leveraging information like what webpages the customers were visiting, what items they were adding to their carts, and the value of those items, made it possible to formulate a strong picture of RGG’s ideal audience. The campaign was then able to more effectively reach and engage consumers showing similar patterns of behavior that were more likely to be interested in RGG’s brands and products. This also made it possible to use hashed email addresses to link ad exposures to purchases.
A worthwhile tradeoff
This more targeted strategy came with a hitch: a 2x higher cost per email sign-up. Yet, RGG found the increased conversion rate of new member purchases offset the upfront cost of getting them to provide their email address. They were paying more for new member sign-ups but reaching a higher-value audience that was more likely to make purchases.
RGG exceeded its target ROAS goals and doubled its new member conversion rate and order value. The company efficiently scaled its efforts, increasing scale 140% YoY on its female-targeted campaigns while hitting target ROAS goals in the third quarter of 2020.
The key takeaways
Be sure to match your KPIs to your campaign goal. If you want to achieve lower-funnel outcomes, ensure your campaign is set up to measure lower-funnel engagement, such as adding items to a cart or filling out a form. Keep it top of mind when creating messaging, defining a target audience and tagging an event as your optimization trigger, for example.
Remember to consider the full picture before declaring a campaign unsuccessful. For instance, if RGG had pulled the campaign because of its higher cost per email sign-up, the company would have missed out on immediate and long-term value. By analyzing a campaign’s impact throughout the entire funnel, you can uncover insights to inform campaign optimization strategies.
Here’s a bonus lesson that can be culled from RGG’s success: It’s really important to understand your audience. LiveIntent helped RGG leverage the data they had about their customers to make better targeting decisions. Audience insights can truly drive greater engagement and conversions.