What is an Impression in Digital Marketing?

Companies are well aware of the fact that the only thing that sells in today’s market, or any market in the past, is what is visible to the customers. When we were all working offline, the companies were fighting for shelf space or ad slots in TV, display hoardings, or radio channels. Now that we are growing, they are fighting for impressions in the digital world. Impression helps the company be visible by showcasing the company’s ad on the screen of the consumer's computer or mobile phone.

In today’s article, we will be diving deep into the concept of impression, why it is important, and other terminologies like click-through rate (CTR), conversion rate, and engagement rate that help companies measure the effectiveness of their ads.

Concept of Impression in Digital Marketing

In layman's terms, an impression means that the browsing website or application will assist you by displaying your ad to the consumer when they are active on the mobile phone or other screens in lieu of payment from your end. A good impression will always have a call to action button, link, or anything else that the consumer can click on to get more information about the product. A very simple example of an impression is that whenever you are playing a game online, you will see ads for other games or products being displayed in between. The entire space on the screen, apart from the cancel button on the topmost right section of the screen, will direct you to the website. So this is known as an impression. You can also see sponsored content on your social media accounts and ads in between your YouTube videos. When you search for something on Google, you will see that the first two links will generally have the word "sponsored" written on the top left side of the link. This indicates that it is an advertisement.

Companies now pay websites or platforms on a per thousand impressions basis. This is the most common method; we do have other methods. This method of charging the company on the basis of cost per thousand impressions is known as CPM (cost per thousand impressions).

Different Types of Impressions

There could be two different types of impressions on the basis of their effectiveness −

• Served impressions − In this case, the total number of impressions served by the company depends upon the server data. To delve deeper, suppose you searched for a specific keyword and were shown a sponsored ad from the browser's side, but you were unable to load the ad's content due to network connectivity issues in your area. So in a way, you have not seen the ad, but it has been an addition to the number of impressions from the side of the browser. Even if the same person sees an ad three times, the company's reach remains the same, but the number of impressions increases. To combat these challenges, companies asked for a better approach to calculating the number of impressions.

• Viewable impressions − This is a more effective way of catching the number of impressions shown by the site. Before deciding on the number of impressions, the browsing website considers the following factors, some of which are −

• Ad-blocking software

• The user scrolled down to the page before even the content could load.

• Errors because of which the content could not load or was skipped in just a few seconds

• Broken plug-ins

• The minimized browser or other windows have ads playing in the background when the user is traveling from one page to another.

• Browsers that are never opened again and others.

Why Should a Company Invest in Digital Impressions?

In digital marketing, impressions help the company in the following ways −

• Wider reach − It aids the company in expanding its reach. With impressions, the company can make sure they are targeting more and more people on the web who could be their potential customers one day.

• Awareness − It helps the company increase brand and product awareness.

• Positive Association − Impression helps the company by creating a positive association with the brand.

• Competitive advantage − It helps the company by giving it an edge over its competitors, and customers are more likely to go for brands they have heard of or seen before than for brands they have no idea about.

With all the above being said, we understand that impressions play a crucial role in digital marketing, but there are many gaps in between. There could be 5000 people seeing my ads every day as per the viewable impression, but that is not earning me money. What earns the company revenue is the conversion or sale. Hence, along with impressions, the companies came up with other metrics to measure the effectiveness of an ad or promotional campaign.

Concept of Click-through-Rate (CTR)

First, comes the click-through rate (CTR), which means that once an ad was shown to the consumers, how many of them clicked upon the ad to know more about the brand or the product offering? CTR is calculated as follows: CTR = Total number of people who clicked on the ad / Total number of people who saw the ad. This helps the company measure the effectiveness of the ad and its aesthetic or content quality.

Concept of Engagement Ratio

After understanding how many people actually wanted to know more about the brand, it is time for us to understand how effective the ad or the content shared was. It means how many people were on the website other than for just a few seconds, how many likes, comments, or shares the company has received, and others. Companies should focus on creating engaging content. Consumers today are shown on average 4000 ads, and they can only remember 200 of them if we are being optimistic. Another way to ensure that they remember your name is by showing them content that they can relate to or that triggers other emotions in them.

Concept of Conversion Ratio (CVR)

Engagement and CTR are important metrics for the business to understand the effectiveness of ads or promotional content, but this isn't what is going to fill the company’s pocket. At the end of the day, the survival of the company depends on sales. As a result, the conversion ratio assists the company in determining how many users saw the ad and how many of those who clicked to learn more actually made a purchase decision.

Companies can figure out if they are lacking something if the dropout ratio is higher than the industry standards and can work on the user journey of the website.

Install more nudges for the consumer and others. CVR = total number of purchases divided by the total number of impressions shown.

We have successfully understood the significance of impression as well as the various other metrics that can assist the company in better understanding the effectiveness of the ad or promotional content. Companies should never think of impressions as a waste of money and set unrealistic expectations for themselves regarding the conversion ratio. They have to understand that consumers are spoiled with choices today and, because of the overload of information, are turning a blind eye to promotional content. They can keep doing their best, and they will eventually get the wheat they deserve.