A short monologue advising that revenue is the sole meaningful metric for evaluating advertising campaigns. The speaker recommends measuring whether a lead source breaks even within 90 days, scaling spend incrementally until it breaks or caps out, negotiating discounts if it doesn't, and otherwise stopping the campaign. Engagement metrics (open rates, CTRs, signups) are dismissed as noise.
Whenever MarketBeat is getting ready to buy advertisements on some new ad network, they always ask us this question. So what metrics do you use to determine success? How will you know if the ad campaign is working? Well, there's really only one right answer, and it's revenue. So we always ask, did we break even on the lead source After 90 days? And if the answer is yes for breaking even at 90 days, we scale the traffic source until it basically breaks, or start at 10,000amonth and then go to 20,000, 30,000, 40,000, 50,000, 60,000. And then eventually, like at some point, you just cap it out. They run out of traffic, they run out of leads, and that's fine. And then you just keep running it as high as you can. If it doesn't break even in 90 days, we can ask for a discount. So it will break even in 90 days or we just stop running the offer. I mean, it's really all there is to it. When you are determining whether or not your advertising is working, revenue is the only metric that matters. Other metrics like email open rates and click through rates and deliverability rates, like the number of unique signups and a lot of the other kind of more, I don't know, engagement metrics, they're kind of noise, so don't pay too much attention to them. Revenue is what you should be focused on.
