The spend on digital advertising has grown manifold, but most companies are still not equipped with the best practices to improve their Returns on Marketing Investment (ROMI). Not only do they need to adapt to the latest marketing models, but also need to measure the efficacy of every campaign they run.
Despite the fact that there is a huge increase in digital spending, not even the top 5% digital spenders have IT infrastructure, automated processes or integrated business capabilities to handle such huge spends. The reasons why digital marketing campaigns under-perform are a lack of knowledge of about tracking capabilities, fragmented & disorganized digital spends as well as a lack of synergy between marketers and agencies.
Therefore, how can companies exploit the power of digital marketing? I believe, companies can improve their ROMI and deliver excellent marketing campaigns if they follow 4 simple practices while executing a digital strategy.
1. Kill the Assumptions
Most of the marketers I’ve met make their decisions based on assumptions and intuitions; the reason for this being, they don’t have the relevant data to back their decisions and hence, are left with no other option. The biggest mistake made by marketers is when they try to align the performance of a campaign with marketing spends. It’s a general tendency of all marketers to attribute the best performing campaign to the medium on which they are spending most of their marketing money. Such assumptions – while conveniently help to justify the spends – are not data-driven and hence, they might be wrong and misleading. Marketers need to kill their assumptions and make their decisions more data-driven, rather than based on their intuition.
2. Develop Tracking and Measuring Systems
Many companies lack the basic IT infrastructure and measuring systems to quantify the efficiency of their campaigns. Most of the companies don’t even use basic Google Analytics when they are running campaigns.
Ideally, companies should measure all the metrics possible. They need to identify the tools and technologies to achieve this. Technically, it is quite possible to track a consumer’s journey right from the first ad impression delivered to the actual purchase. The marketing team can then identify a single (or a set of) marketing metric(s) they want to measure, and how – based on the objective of the activity. Marketers need to develop or harness a system which can help answer simple questions, such as:
- What is my cost per qualified lead?
- What is my cost per conversion?
- If I am running a branding campaign, what is the cost per 1000 people reached
- How many brand touch-points do I need to make with a consumer before he makes a purchase decision?
- Which sources are driving both volume and velocity? And at what cost?
- What is the opportunity cost of a source? If I would have invested the same amount of money on another source, in how much time could I have achieved the same results?
3. Develop Uniform Digital Strategy
Most of the digital marketing campaigns fail because they don’t have a unified digital strategy to execute the campaigns. Although companies have huge marketing budgets to spend on digital media, because their campaigns are out of sync and/or one-dimensional, they don’t get the desired return on marketing spends. Marketers need to devise a digital strategy which will employ a combination of high impact and sustenance campaigns. High impact campaigns need to be activated across all mediums at the same time, so as to get the desired visibility and share of voice. The messaging and communication has to be uniform across all channels to have better recall and to make sure your brand is on top of the customer’s mind. Marketers need to focus on a 360-degree approach rather than executing campaigns in silos. What follows here is the channel list that you need to include in your digital strategy:
- Search Networks (Google, Bing, and Yahoo)
- Display Networks (Google Display Network, High traffic publisher sites.)
- Social Media Marketing (Facebook, Instagram, Twitter, YouTube)
- Content marketing (Blogging, video blogging, articles, Press Releases)
- Database marketing (Email and SMS)
4. Measure the Total Impact
The efficacy of a digital marketing campaign should not be measured just in terms of impressions, clicks, and leads, but also in terms of how much it has affected your offline/direct sales. The biggest mistake committed by marketers, when they try to measure the efficiency of an online campaign, is that they don’t measure (or don’t have the ability to measure) the earned and direct traffic, walk-ins into stores, etc. Marketers don’t have attribution models set up to measure the effect of a digital campaign on offline sales. Having said that, several approaches can you help you to get a clear picture of what is affecting your offline sales. For example, companies can use heuristic analysis and surveys on a consumer’s decision journey to find out the total impact on their sales.
So what metrics should marketers consider when they measure the total impact of a digital campaign?
- Impressions, clicks, and visits.
- Social mentions, Likes, People talking about the product/brand.
- Direct traffic, Product/Brand related keyword searches.
- Direct walk-ins into stores.
- Referral Sales.
The digital market is radically evolving and marketers need to keep pace with the new technologies and innovations in the market. Marketers are getting more choices for advertising, and spends are going to be more fragmented. What they need to focus on is employing effective tracking and measuring systems. With the advent of new technologies, tracking software and big data enabled analytics systems are getting cheaper, yet more efficient and usable. Such technologies will help marketers to make their decisions more data-driven and profitable.
Happy (Data-Driven) Marketing!
Credits: Vinayak Katkar