What is the best way to measure the impact of display ads on customer lifetime value (CLV)?

1 Why CLV matters

CLV is a crucial metric for media sales because it helps you understand the return on investment (ROI) of your display ads campaigns. Display ads can have different goals, such as increasing brand awareness, driving traffic, or generating leads. But ultimately, you want to know how your display ads affect the bottom line of your business. By measuring CLV, you can compare the lifetime value of customers who were exposed to your display ads with those who were not, and see how much revenue your display ads contributed to your business.

4 How to segment customers by CLV

Once you have tracked the exposure of your customers to your display ads, you can segment them by their CLV. Segmentation is the process of dividing your customers into groups based on their characteristics, behaviors, or preferences. By segmenting your customers by CLV, you can identify the most valuable customers for your business and tailor your display ads strategy accordingly. For example, you can segment your customers into high, medium, and low CLV groups, and compare their exposure to your display ads. You can also segment your customers by other criteria, such as demographics, interests, or purchase history, and see how they relate to their CLV.

5 How to optimize display ads for CLV

After segmenting your customers by CLV, you can optimize your display ads for CLV. Optimization is the process of improving your display ads performance by testing and adjusting different elements, such as the design, copy, placement, or timing of your display ads. By optimizing your display ads for CLV, you can increase the effectiveness of your display ads campaigns and maximize your ROI. For example, you can test different display ads creatives for each CLV segment and see which ones generate the highest response rate, conversion rate, or retention rate. You can also optimize your display ads budget and bidding strategy based on the CLV of your customers.

6 How to report display ads impact on CLV

Finally, you can report the impact of your display ads on CLV to your clients or stakeholders. Reporting is the process of communicating your display ads results and insights using data, charts, or stories. By reporting the impact of your display ads on CLV, you can demonstrate the value of your display ads services and justify your media sales decisions. For example, you can show how your display ads increased the CLV of your customers by a certain percentage or amount, and how that translated into more revenue for your business. You can also highlight the best practices and learnings from your display ads optimization and segmentation processes.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?