Digital Marketing ROI: Are You Asking The Fundamental Questions at the Outset?
Are you like many other marketers getting too wrapped up in reporting on ‘signals’ rather than activity that purposely impacts overarching business objectives? Perhaps, not sure…? Then read on…
I’m in the middle of running a 3-week digital first training programme – purely via interactive webinars, to a global marcom team within a large manufacturing organisation.
As part of the programme, across the training disciplines: Email, SEO, Content Marketing and Social Media, the topic of metrics and measuring ROI is a critical component.
I often hear about the challenge of deciphering the plethora of data that digital enables, to fully understand what’s working and to make informed decisions. However, as a practitioner myself, I think we can get into the bamboozling territory of running too many dashboards and over complicating things. Resulting in a lack of clarity.
Signals -v- Hard ROI
There are a number of ‘signals’ that digital enables. With email we may be looking at, open rates, click through rates, link clicks, opt ins, opt outs. On social media, we’re reporting on; likes, shares, comments, follower growth. For content marketing, we’re looking for signals as to how our content is landing, again, engagement signals; comments, shares, link clicks, traffic growth, brand mentions etc.
Such indicators can be very useful in helping to identify if our activities are landing and assist with the continuous optimisation required as part of our digital activity.
After all, the ‘set it and forget it’ mentality of historical traditional marketing campaigns, just doesn’t cut it in our continuously iterating, digital landscape.
However, such signals in and of themselves cannot be the sole measure of ROI.
Indeed, it’s wise to have targets for growth and for engagement to check that your campaigns are exceeding targets or indeed falling short. BUT, these targets are not the overarching ROI. They are again, ‘signals’ that you’re on the right track or not.
As a marketer I believe, when it comes to being strategically aligned with overarching business objectives, this is where many of us fall short.
If the overarching objective of the organisation is to increase revenue by X in Q2 – then the question to be answered at the outset by the CMO, Director or Head of Marketing or Marketing Manager (or as in many cases, the Business owner), is – ‘how are our marketing activities going to contribute towards that very specific objective?
With clarity on the answer to that question – that determines the metrics to measure that make impact and therefore, that actually really matter.
Thanks to digital, the marketers’ toolbox has expanded significantly. And, yes, there are more tools to utilise as part of campaign tactics. However, the fundamental ROI aspect remains the same. How do we ‘plug in’ each channel to deliver on the overarching business objectives.
I see too many marketers and business owners getting caught up in measuring tactical outcomes. Things such as; likes, shares, engagement, open rates, click through rates. These do not deliver ROI. They are purely ‘signals’ that shape activity.
From my experience, clarity in business objectives and translating what the purpose of the activity truly is, is often missing. So instead, campaigns focus reporting on aspects that are very visible. The ‘signals’.
To illustrate my point, let’s take a really simple example:
Let’s say the organisation has a clear business objective to increase revenue by 10% in Q2.
Teams or business units within the organisation are clear on that objective and have to figure out what their activity is going to look like for the quarter.
Let’s say, one activity the B2B marketing team is going to focus on is driving relevant leads and converting 5 to bottom line revenue over a 90 day period. An integrated series of activity is created to new and prospective audiences throughout the awareness and decision making funnel. This includes: webinars, email campaigns, paid ads, social media, content marketing etc – all with the focus of driving leads to fundamentally convert those leads into bottom line revenue.
The activities undertaken provide signals that steer informed activity eg: open rates, click through rates, engagement, shares, likes, follows etc. Informing whether you need to be dialling things up, pivoting and trying something else or tweaking and optimising.
The leads generated create revenue opportunity.
The conversion of those leads is the fundamental bottom line hard revenue generated.
Of course, one clear success metric is the actual number of leads all activities are driving.
But if the bottom line is actual hard revenue - then the number of converted leads may be what you need to report on. The fact that you have built leads into a pipeline can still have a £ value based on typical conversion rates and the length of your pipeline. So, if you drive 50 leads and 5 direct conversions. But you know your conversion of pipeline leads is 20% over a longer time period. Then you have 10 very likely sales that will come over the line in the future. Aligning your ROI with the methodology that meets the overriding business objective.
My favourite all time quote by Zig Ziglar, ‘Those that aim for nothing hit it with remarkable accuracy’ – describes the ROI challenge clearly. The key is to start with the end in mind, ensure that you have absolute clarity on what the overarching objectives are – and then focus activity to align with delivering on those objectives.
Your signals are supers useful, don’t get me wrong. But don’t confuse signals with ROI.
Be sure to ask the fundamental ROI questions at the outset. And always remember that strategy dictates tactics – not the other way around.
#digitalmarketingmetrics #ROI #digitalmarketing
Michelle Carvill – Founder, Digital Marketing and Social Media Agency, Carvill Creative. Digital Educator. Strategic Marketer. Three times published author. Latest book ‘Get Social - Social Media Strategy and Tactics for Leaders, published by Kogan Page, May 2018. Get in touch via www.michellecarvill.com