Ads (3): Interpreting ad performance and metrics

Before explaining more about how ads work, there are three basic concepts about ads that we would like to share with you.

1. Advertising performance and costs will vary across industries and product types. To improve ad performance, try to improve and optimize your listing.

2. After placing an ad, please remember to regularly check on its performance. We recommend that you review the performance of your ads on a weekly and monthly basis in order to avoid having short-term fluctuations in performance affect your decision making. Spending on ads is a type of investment. If done properly, it can effectively help your shop to increase revenue. However, if not managed properly, you may not receive the expected results.

3, As seen in the marketing funnel graphic below, all conversions are derived from initial impressions and clicks. Therefore, if you want to get more order conversions, you’ll need to get more impressions and clicks.

Pinkoi Ads provides relevant metrics for measuring performance before and after ads are placed for a listing. You can use these metrics to optimize your listing. The descriptions below will show you how to interpret all of the metrics found on the Pinkoi Ads page.

• Ad Performance: metrics obtained after ads were run for the listing.

• Organic Performance: the composite performance of a listing in search results and under listing categories without having ads run for it.

• Impressions: Each time a listing is displayed to users in search results, under product categories or in ads counts as a single impression.

• Click: Each time a user clicks on your listing and reaches its product page is counted as a click.

• CTR (click-through rate): CTR = Clicks ÷ Impressions. In other words, it is the percentage of the time that you get a click for each impression. For example, if you had a CTR of 5%, it means that for every 100 impressions you had 5 clicks on your ad.

• Max. CPC Bid (maximum cost-per-click bid): The maximum amount you are willing to spend for each click on your ad. The higher the max. CPC bid, the greater the chance of getting a better ad position. The max. CPC bid is not the same as the actual cost per click.

• CPC (cost per click): CPC = Ad Costs ÷ Clicks. This represents the average cost incurred each time a user clicks on your ad.

• Daily Budget: This is the maximum amount that you are willing to spend on ads each day. When the accumulated ad costs for a day are close to the daily budget, the system will automatically stop running ads for you until 5 AM (UTC +8) the next day.

• Conversion: A conversion broadly refers to any goal or target that you hope to achieve (for example, having an item added to a shopping cart, Wish List, or having it purchased, etc.). For Pinkoi Ads, each time a customer completes an order is regarded as a conversion.

• Ad Costs: The cost of ads is calculated based on cost per click (CPC) for listings that receive clicks via exposure from ads. 

• Ad Revenue: Ad revenue is the order revenue generated for your shop via exposure from ads. The attribution period for ads is 30 days. This means that revenue from an order placed by a user within 30 days after they click on your ad will be considered ad revenue. If an ad is disabled, the revenue generated by clicks on it from the past 30 days will still be recorded as ad revenue.

*The revenue displayed is for reference only. Actual revenue may differ due to differences in exchange rates.

• ROAS (Return on Advertising Spend) = Revenue ÷ Ad Costs. ROAS shows you how much revenue ads bring in for every 1 dollar that you spend on them. 

• Listing Quality Score: Listing quality scores are determined by factors such as listing popularity, product page quality, user browsing behavior and listing relevance. These factors comprise of criteria such as sales volume, listing CTR (including ad CTR), listing titles, summaries, descriptions, tag and listing relevance, category and sub-category correctness, and comprehensiveness of other product information. 

• Avg. Pos. (Average Position): Average position is the average rank of your listing in search results, under listing categories and in ads. Generally speaking, regardless of sales, the higher the relevance of the listing and keywords, the higher the ranking of the listing, indicating that it is fairly easy for the listing to obtain a relatively large number of impressions.

In order to help you quickly grasp the current average position of a listing, its average position on the desktop version of the Pinkoi website is displayed. For example, if the average position of your listing is displayed as “12 / P.3”, this means that its average position is the “12th” listing on “page 3”. The listing’s average position will differ depending on the device, however, the overall average ranking of the listing is the same on all devices. If you would like to calculate the average ranking of your listing, you can do so using the method below.

Example: 

The average position of Listing A is “10 / P.5”. It is the “10th” listing on page “5”. 

There are 60 items per search results page, so:

(60 x 4 pages) + 10 = 250

Therefore, the average ranking of Listing A is 250.

The metrics for Pinkoi Ads are updated daily at 11 AM (GMT+8).