The benefit of modern technology is that it’s now easier than ever to track the performance of your marketing activity and therefore its return on investment (ROI). That means you should be able to see the impact of online marketing activity on things like website traffic, leads/enquiries and sales.
If you don’t measure the performance of your marketing spend, there’s a good chance your marketing activity isn’t delivering value for your business.
Where to start
With a virtually never ending number of potential metrics, it can seem overwhelming and difficult to know where to start. The solution? Choose metrics that are directly aligned to your business goals and measure only what you need to.
By focusing on key metrics that will provide actionable insight, you can use analytics to inform and improve your marketing strategy. We use 90-day cycles with our clients as this is a good length of time to try something out, measure it to see how successful it was and learn from it.
Calculating marketing ROI
Although the equation for calculating return on investment is at first glance very simple (gross profit from marketing activity / marketing spend) it can be difficult to arrive at an accurate figure for a number of reasons:
- If appropriate tracking isn’t set up, it can be tricky to measure which results were as a direct result of marketing activity.
- When marketing activity is conducted in-house, spend on staff often isn’t taken into account.
- Sales journeys are not always straightforward – most online purchase journeys involve several visits before a sale. Therefore, attribution can be difficult.
- Some marketing investments, content marketing for example, are longer term. Results from content marketing may be gradual and it could take up to six months before you start to see results.
- A sale may not be the best measure – you may prefer to look at the lifetime value of a customer.
For this reason, it’s best to define a range of metrics to measure ROI – such as:
- Number of enquiries
- The number of unique visitors to your website
- The number of new visitors to your website
- Visitors from search/social
- Engagement with content (time on page/number of shares)
Tools for measuring and optimising digital marketing activity
Many free analytics tools are more than adequate. It’s what you do with the information that’s more important. Some useful tools include:
- Google Analytics
- Google Webmaster Tools
- Google AdWords reporting
- Twitter Analytics
- Facebook Insights
- Shopping cart system
- Lead tracking or marketing automation systems
Note: If you have a marketing agency or freelancer who is withholding access to reporting or results, alarm bells should ring. Always ask for full access to your analytics accounts and for reporting on results of marketing activity.
Not getting measurable results from your marketing activity?
Sometimes you don’t know what you should be measuring or what is possible to measure until someone shows you. If this sounds like your situation then get in touch for a free no-obligation chat.