The Ultimate Guide to Measuring Marketing ROI
Very often, a business’ success greatly depends on marketing to drive growth. For decades, we’ve seen a steady increase in marketing budgets across the globe. However, spending more money on marketing does not necessarily mean greater results. Just as often, a business’demise can be linked back to irresponsible marketing spend.
And so, the trend is shifting.
Budget Optimization and Measurement Are the New Points of Focus
The CMO spend survey 2017-2018 shows that the marketing spending went down by 0.8% in 2017 compared to 2016. In 2016, the marketing budget of the companies was at 12.1% of the revenue of a company whereas the same was at 11.3% in 2017. According to Gartner, marketers are expecting to reduce their marketing budgets or keeping them at the same level.
Does this mean CMOs are losing trust in marketing?
Not at all, they have simply realized that the size of a marketing budget does not correlate to the success of the marketing campaigns.
There is a new pressure on marketers to shrink their budgets and tighten their focus on optimization solutions and data measurement that drives more informed decision making- hence the term data-driven marketing.
At the same time, marketers are looking to improve customer retention and LTV by creating more personalized experiences throughout the customer lifecycle.
Trends within the data are helping marketers discover their target segments and identify which channels and methods are working best to reach them. Every step along the way revolves around data.
Understanding Cross-Channel Marketing
As technology continues to broaden the scope of what’s possible, marketers must stay up to date on the latest trends and tools available to manage their marketing campaigns.
Every day, our customers are on multiple devices across various channels. And we want to reach them wherever they are. As a result, cross-channel marketing has emerged as the new standard. This means, we need to think about varying our messaging depending on the customer’s environment, and measuring the effectiveness of each and every touchpoint.
If you think this sounds like a daunting task, you are not alone.
The good news is, this guide will walk you through everything you need to know to measure all your marketing data and get a complete picture.
Marketing KPIs- What Metrics Should You Measure?
KPI stands for key performance indicators. While you can apply KPIs across any business function, we will discuss them here in the realm of marketing. Marketing KPIs are the most important metrics that will depict performance of your efforts. Your team should meet periodically to identify KPIs, set goals and then work to achieve those goals.
All KPIs must have these following characteristics.
- They have to be actionable, i.e., you should be able to take action based on KPIs.
- They must be directional, i.e., they must indicate the good or bad performance of the company.
- They are quantitative, i.e., you have to be able to write them down in number form.
- They have to be practical, i.e., you can integrate them with the current processes of your company.
In other words, your KPIs have to be SMART:
While measuring your KPIs, set timelines and intervals to check in on whether KPIs are showing positive or negative growth.
When it comes to marketing, here are the most important KPIs to track:
Website Traffic: Website traffic can be an excellent indicator of overall awareness and organic search volume. You can use tools like Google Analytics to track how your site traffic is performing over time and which channels are driving that traffic.
Number of Leads: Leads are your first step towards success—you’ve managed to capture some information about potential customers. It’s like you’ve sown the seeds and the plants have pushed their heads out of the soil. The only thing left is to help the plants grow to the desired size.
Conversion Rate:Whether you send paid traffic to your website or an independent landing page, that page is only as good as the number of leads it converts. In order to measure the effectiveness of your landing page copy and design, you’ll want to track the percentage of visitors that convert into leads over time.
Cost Per Lead: Driving new leads for your sales department is great but how much does it cost you to acquire each new lead? You can divide the overall cost of ad spend by number of leads to find out.
Cost Per Acquisition:When your leads convert into paying customers, you’ve actually acquired real value. Divide the overall cost of ad spend by number of paying customers to find out your CPA.
Allowable Cost Per Acquisition: This metric will get you very close to seeing the full picture. All marketing channels are not created equal.You can learn a lot about which marketing channels are working best for you based on how much net revenue is being generated as a result. You can evaluate this by segmenting paying customers by the channel from which they were acquired and calculating the total sales revenue from each channel minus the overall spend on that channel and your gross margin, divided by the number of paying customers from that channel. Now you have your allowable cost per acquisition for each channel. This will serve as a guide post for how much you should be spending to acquire a customer in each channel. You may find that the value of an acquisition varies greatly depending on the marketing channel in which they were acquired. This can be a huge unlock for optimizing your marketing spend by focusing on channels that drive the most revenue for your business.
Activate Rate:As you hone in on optimizing your marketing efforts, you’ll want to keep an eye on what percentage of leads activate and become paying customers. Ideally, you’d see an increase in activation rate as you begin to apply more optimizations to your marketing campaigns.
App Downloads: If there is a mobile app component to your business, you will want to track the number of app downloads over time and may need to employ additional tools like Appsflyer to dive deeper into your metrics and understand the complete customer flow and funnel.
The Problem with Data-driven Marketing
Cross-channel marketing means you have a lot of data to manage. And it’s coming from a variety of sources in a variety of different formats. In order to make sense of all this data, you need to have it all in one place. This can become a tedious and time consuming challenge. Think about all the different platforms you are using today to run campaigns, and all the data you are collecting as a result:
- Customer names
- Customer locations
- Number of visits
- Website visit duration
- Brand mentions
- Form data
- Customer interests
- Browser information
- Mobile operating system type
- Online purchase history
- Click-through rate
- Conversion rates
- Organic traffic
- Paid traffic
- Bounce rate
- Customer age group
- Social media followers
- Touchpoints with the sales team
Just to name a few!
You can segment this data into nine different categories:
- Marketing metrics
- Voice of the customer
- Preferences and interests
- Competitive intelligence
- Market research
- Customer data
While all this information is crucial to your business, managing this data in a way that provides visibility into the “full picture”can be time-consuming and inefficient. An Ensighten surveyshowed that 85% of the marketers can’t use their data to its full advantage, while another 62% are overwhelmed by it all.
Luckily, the development of new data aggregation tools, like Improvado, are streamlining the marketing analytics process and saving teams countless hours of tedious data exports and spreadsheet work.
The old way:
Marketers would spend hours each day, week or month exporting a csv from each marketing platform. That included website data from Google Analytics, customer data from Salesforce, and campaign specific spend data from Facebook, Adwords, Bing, Yahoo, Linkedin, YouTube, Pinterest, Snapchat, Adroll, Outbrain, Taboola and so on.
In order to view all this data in one place, marketers would need to create their own dashboard on Excel and manually map all the data with formulas.
The more sophisticated marketers might upload all this data to a visualization tool like Tableau or Looker to create reports that can be shared internally or with external clients.
If you wanted to get an updated picture of your marketing performance, you’d need to start from square one and export all the data again.
Marketers who were lucky enough to have engineering support, began requesting API integrations with the various marketing platforms, hoping for a way to automate this process. What they soon discovered was that having your in-house engineers build API integrations can be a costly use of their time (often upwards of $100k-$200k), especially considering that the marketing landscape is constantly changing. New updates and integrations are common and would be tedious to accommodate and support.
Luckily, there is now a more cost-efficient and time-effective way.
The new way:
Improvado was built to solve this problem.
A data aggregation tool that seamlessly integrates with every marketing platform, delivering all your data to you, in minutes. Now all your data updates in real time and you can view it in any visualization tool you like- whether that’s Excel, Tableau, Looker, you name it.
Improvado simplifies the marketing management process by bringing all the marketing data onto one dashboard, allowing you to make informed optimization decisions. Not only does it allow you to view the data, but it actually lets you take action on the data, making campaign optimizations without leaving your dashboard.
Improvado offers three different solutions depending on your marketing needs:
Who it’s for:Marketers and small marketing agencies who don't use a visualization tool (like Tableau), don’t use a data warehouse and don’t have technical resources.
What’s their problem:“How do I get data from my 5-10 channels in one place and unified so I can access real time reporting and make informed optimizations?”
How Improvado solves it:The Improvado reporting platform allows marketers to aggregate their data across all paid campaigns, website data and salesforce and visualize that data within the Improvado dashboard in minutes.
Who it’s for:More advanced marketers and marketing agencies who already utilize a visualization tool like Tablaeu, have a data warehouse, run sophisticated cross-channel marketing and have engineering resources. They’re struggling with aggregating and transforming their data and having the proper connections to each of the platforms.
What’s their problem:“How do I get my 20 channels in one place and unified and pump it out somewhere else, whether that’s back into my data warehouse & visualization tool without lifting a finger?”
How Improvado solves it:The Improvado Marketing ETL allows marketers to instantly aggregate, transform data from any marketing platform and send it to the visualization tool of their choice. Improvado provides the engineering resources necessary to build out any custom API integrations necessary to complete the marketing data picture.
Who it’s for:Technology companies, like Hubspot, who are looking to pull paid marketing data into in-house dashboards.
What’s their problem:“How do I visualize all of our marketing campaign data within my company’s internal dashboard?”
How Improvado solves it:The Improvado API data snaps into any technology platform. Pulling in all the advertising data to visualize it within a company’s internal tool without them feeling like they ever left the platform.
· How It Works
Improvado makes cross-channel attribution possible and lets you know how each campaign is performing and impacting your budget and KPIs. your marketing budget and the set KPIs.
The marketing ETL platform allows you to integrate the various marketing channels in one place without requiring the help of any developers. Currently there are more than 70 integrations available and you can view their reports on a variety of tools including Excel, Google Docs, Looker, Tableau, etc. This means you will be able to see your important marketing data the way you feel comfortable. Some of the data sources that you can integrate onto Improvado are as follows:
- Facebook Ads
- Bing Ads
- Google AdWords
- Facebook Pages
- Google Trends
It is no secret that sometimes you are not able to make any sense out of the data only because it is presented in a complex format. You can see here that Improvado is the most complete solution out there making data-driven marketing a breeze for you by allowing you to manage all your favorite data source platforms in one place.
The best thing about Improvado is that it keeps the options opened for you, so you can have your platform your way. You don’t have to make adjustments to the settings provided by the developers. For example, when you get multiple data sources in one place to manage them from one location, it is up to you to use a data warehouse that you own or go with the PostgreSQL provided by the Improvado developers.
The custom dashboard on Imprvado is the most intuitive and visually pleasing one you can get your hands on. With clear graphs, easy-to-read charts and vivid pie charts, you can know at a glance how well your marketing budget is being utilized and where you need to make improvements.
So, you have to come out of the impression that people create online that you have to be adept at using the various digital marketing tools in order to market successfully on the internet. The truth is that using all those tools can be very time-consuming and counter-productive. There is no shortage of marketing tools trying to give you the upper hand over your competitors when it comes to marketing campaigns. However, the real need now is to manage those tools in an efficient and intelligent manner. With that objective in mind, Improvado is definitely the most reliable and viable marketing solution out there.