Measuring Your Marketing ROI: Are You “Busy” or Actually “Productive”?
Click-through rates, website conversions, Twitter followers: Watching the numbers tick up can seem like progress, and tracking them can be a job in itself. But while charting traffic to your PPC, email campaigns, website, or your social media outlets can keep you busy, is it actually producing results for your company? According to a research study, 82 percent of marketers say their executives want every campaign measured, but less than a third can effectively evaluate each channel’s ROI. That means if your company can effectively measure your marketing ROI, you’ll be blowing two-thirds of your competition out of the water. More good news: it doesn’t take a data scientist to do it.
Here’s the bad news: Anything worth doing takes effort and foresight, and crafting the perfect ROI formula is no exception. Learning what to measure, when to measure, and how to measure takes the buy-in of not only the marketing team but the leadership of your organization. The key to creating value with your marketing strategy is aligning marketing analytics with your company’s financial goals, and using predictive modeling to adapt your campaigns to reflect those goals. In other words, does that click on your email campaign end in a sale or not, and how do you ensure more of the former in the future?
Only 48 percent of marketers are using web analytics tools to measure marketing campaign effectiveness. (Riots in the streets should begin now.) Again, see the upside here: if you’re measuring return on marketing investment, and using the data to hone your strategies, you’re doing better than most of your competition. If you’re not, or not feeling too confident about your methods, well, keep reading.
First rule of marketing ROI: more expensive leads can often be the most qualified and produce the most revenue. In other words, more clicks do not necessarily mean more profit. Keep that in mind as you consider these simple but valuable ways to track your marketing ROI:
Get Targeted with Your Conversion Tracking
- WEBSITE CONVERSIONS: Set up conversion tracking in Google AdWords and/or goals in Google Analytics, which can be imported into AdWords. You can use both at the same time, or just one. AdWords offers useful traffic-focused metrics—but not if they’re not set up in the first place.
- CALL TRACKING: Use different phone numbers in your ads and landing pages, and review incoming calls to see which incoming leads are converting.
- CRM INTEGRATION: Sync these valuable leads with your CRM, so you can track which campaign brought you which client. At which stage in the home buyer’s journey are they: “just looking” or ready to go? Details like that can help you target your marketing even more effectively.
- DYNAMIC REVENUE TRACKING: Better yet, place a value on specific conversions so you can compare revenue and get your ROI right in Google AdWords.
Divide and categorize your marketing efforts as those which produce direct and indirect ROI; both are valuable, but in different ways.
- DIRECT ROI: Running an offer with a coupon or a tracking phone number that can produce measurable results is marketing 101. Check your efforts here.
- INDIRECT ROI: More difficult to quantify, but no less important. For example, improved brand messaging may have been integrated into a new PPC campaign, which generated x results. This feedback could help you better identify your target client, choose distribution methods, and more.
[sc name=”book cta for HS” imageid=”27055″ ctatitle=’MARKETING METRICS YOUR BOSS CARES ABOUT‘ copy=”Do you know which metrics actually matter to your boss or C-level executives? In this cheat sheet of metrics, we’ll share the six metrics that do. ” url=”marketing-metrics-your-boss-cares-about” button=”GET IT NOW” ]
Test Constantly and Consistently
Testing is the exception to the “more is not always more” commandment above. Testing is learning. Experiment frequently with different methods, or an action versus no action at all. Conversion rate optimization (CRO) testing helps you see which of your efforts are the most effective, and if there’s room for improvement on a current campaign.
Create an Efficiency Report
Don’t stop at high-level metrics, such as the overall traffic coming to your website, the number of website conversions (i.e. form fill-outs), and the cost per conversion. Remember, busy is not the same as productive (i.e., creating revenue). Here are two types of custom reports, both of which can be created in Google Analytics:
- VISITOR ACQUISITION EFFICIENCY: Measure all streams of traffic to your website to see which result in the most sales. This report may show that referral sources have generated more leads than your weekly emails, but your weekly emails may have a higher lead conversion rate; therefore, they are more valuable to your website.
- PAGE EFFICIENCY ANALYSIS: Test specific website pages to see which provide content that is better at converting visitors. As an added bonus, if you can add a value and a cost to each conversion, then you can really get insight into your marketing ROI.
Get Help Measuring and Optimizing Your Marketing Efforts
Marketing professionals have struggled with metrics and measurement for as long as the profession has existed. Merchant and marketing pioneer John Wannamaker summed up the challenge when he said “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” Only if Mr. Wannamaker was alive today.
The modern marketing professional is hardly strapped for data. Thanks to advanced platforms like Omniture, Google Analytics, Facebook Insights, and Hubspot, we can now get closer to an ROI. But with so much access to marketing data, the bar is only getting higher to show value to the business.
Looking for help measuring and optimizing marketing performance? Subscribe to Simply180 Insights, our weekly digest. You can also take advantage of our complimentary analytics assessment. Contact us and one of our super smart marketing analysts will get back to you with information we need to get started.