Return on Marketing and Advertising
In this tough competitive time and media saturated marketplace coupled with savvy consumers, companies are looking at ways to maximize the return on their advertising dollar.
In recent newsletters, we discussed percentage of budget to be spent on advertising as well as where to advertise. So you have decided on a budget spend and where you ‘think’ your best target market lies. In this newsletter we will address how to know if your advertising campaigns are showing a profitable return on advertising [ROA].
Have you in fact chosen the most profitable sites? Is your advertising dollar going to the correct media and audience? Click through rates [visits to your online marketing sites] are no indication of how much revenue is generated from the advertising [the conversion rate].
It is also important to include in considering the overall return, the ‘soft’ cost of advertising. That is the cost outlay other than the ad itself, i.e. the time spent on developing, the cost of a graphic or web designers, outside budget analytics, etc.
Here are three recommendations to better analyze the return on marketing:
1: Apply Data to Decision-Making
Rather than relying on time-consuming, internal spreadsheet-based analysis, consider implementing marketing mix modeling [marketers can identify the mediums consumers engage with the most. MMM provides a report of where and when media is engaged over a long stretch of time], multi-touch attribution [attribution modelling is the process of understanding marketing channels that eventually lead to conversion and sales, in more immediate time] or other analytic solutions to evaluate and optimize your decisions.
2: Use a Scenario Planning Tool
Use a scenario planning tool to forecast the impact of different spend levels in a virtual environment prior to making real-life budgeting decisions.
3: Get Support from External Experts
Marketers today realize that to engage consumers successfully they must have an in-depth analysis of the entire journey—both online and offline as well as across devices. As noted above, using marketing mix modeling, multi-touch attribution or another advanced analytic solution to evaluate and optimize budget decisions can give you confidence that you are spending your company’s dollars wisely, but can you or someone in your operation do this in house!
When the expertise, data, analytics, and tools aren’t easily available to you, consider seeking support from external analytic service providers. Investigate the cost of consulting with an expert to achieve the insight you need to drive meaningful results for your business. Some can be expensive however spending advertising dollars in the wrong areas can be more expensive and unproductive.
The technology media is vast these days. What is right for you? SEO [search engine optimization, PPC [Pay Per Click], SMO [Social Media Optimization]. What could be expensive [SEO], effective [PPC], generate viral publicity [SMO] or even traditional hard copy or meet ups, what will be your best marketing dollar spend?
“Marketing is getting more complex. As marketers in all industries race to keep up with the demands of the digital era, they look for advice that will help them measure the efficiency and return on investment for every type of investment across channels, businesses, products and markets. Using the right tools, technologies and expertise to get a handle on how spend impacts performance may be the wisest decision a budget-planning marketer can make.” Wayne St. Amand of Visual IQ
In summary, of course you must consider your advertising budget and assess your target market, but very importantly, analyze your projected return on the area of advertising. Spend your advertising and marketing dollars wisely! Doreen Levitz ASE