What is Flow-Through Rate?
Have you ever wondered why some digital advertising campaigns succeed while others fail? It turns out, one of the most important metrics to measure success is something called flow-through rate. Understanding and optimizing the flow-through rate of your digital ads can be the difference between success or failure in your marketing efforts. In this article, we'll discuss what flow-through rate is and how it affects your digital advertising campaigns. We'll also explore ways to calculate and optimize your flow-through rate, as well as which factors can influence it. Finally, we'll look at how Google Analytics can help you monitor performance along the way. So if you want to get the most out of your digital ad campaigns, read on!
Flow-through rate (FTR) is a metric used to measure the effectiveness of digital advertising campaigns. It is calculated by dividing the number of conversions or desired actions resulting from a campaign by the total number of impressions, clicks, or other engagements with an ad. By tracking FTR, marketers can gain insight into how well their ads are performing and adjust their strategy accordingly.
Remember in marketing when you were taught how funnels work? Think of it the same way, except there's a volume of individuals in each of the funnel stages and the action which would take someone to the next stage is what we're attempting to measure.
By measuring the effectiveness of each step, we can get incredibly clear information as to what step in the consumer journey is doing fantastic, and what steps need work.
Why is Flow-Through Rate Important?
Flow-Through Rate is an important metric for digital advertising campaigns as it gives marketers insight into how well their ads are performing. It helps marketers analyze the effectiveness of their ad campaigns so they can adjust them accordingly to maximize return on investment. Additionally, FTR allows marketers to evaluate different aspects of their campaign and ensure that all facets of their strategy are delivering consistent results. By doing this, they can optimize their campaigns over time and better understand which techniques are working best for their brand.
How to calculate Flow-Through Rate
In order to calculate FTR, marketers must first determine the number of impressions or clicks their campaigns have received. Then, they can divide that number by the total conversions generated by those campaigns in order to calculate FTR. For example, if a campaign had 1000 impressions and resulted in 10 conversions, its FTR would be 10%. It is important to note that this calculation should be performed over an extended period of time (e.g., at least a month) in order to accurately gauge the effectiveness of a given campaign. Additionally, it's also important to factor in any additional costs associated with running a campaign, as these costs will affect overall ROI and thus should be taken into consideration when calculating FTR. By understanding how to calculate FTR properly, marketers can make informed decisions about their campaigns and ensure they are achieving maximum ROI from their ad spend.
Calculation: # of actions taken / total number of individuals which could have taken action x 100
How To Improve Flow-Through Rate
The #1 reason we see flow-through rate fall is due to content quality. While content may be clear in its intention, it's important to consistently review messaging, tone, and creative in your paid advertising strategies. Things as simple as weather, which can be relevant in winter months, can quickly become the demise of Q2 performance where your key markets have no alignment to winter-themed content.
Other opportunities to improve flow-through rate include:
Market segmentation - Finding the right audience that's ready to take action is crucial to driving down cost while lifting FTR. To audit effectiveness of your campaigns, establish clear A/B testing with only one variable change and review the results. Continue to test and optimize content as the metrics become solidified. Remember, paid advertising isn't an end goal, it's an everchanging landscape!
Understand market targets - Optimizing towards generic metrics which Google provides is not healthy. With CTR's ranging from 2.30% on feed ads to .1% in other industries, the most important target to achieve is improvement. Ensure baseline targets are created using historical information and aim for monthly improvements within your FTR.
About MetaMartini
We believe that a story can transform how a consumer views your brand.
We create world-class creative strategies that blend innovation, imagination, and storytelling to grow lifelong customers that care about who you are. Our strategies are built with systems that inform, engage, and inspires communicating complex information through simplified design.