MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING

MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING

Marketers are under pressure to prove how online efforts contribute to their company s bottom line with cold hard analytics. IN THIS GUIDE, WE WILL LEARN HOW TO IDENTIFY AND TRACK KEY PERFORMANCE INDICATORS (KPI s) THEN MEASURE RETURN ON INVESTMENT (ROI) SO YOU CAN ATTRIBUTE DIGITAL MARKETING EFFORTS TO THE SUCCESS OF YOUR ORGANIZATION. 2

Marketing Executives Tell Us How They Really Feel 52% - It s challenging to connect marketing goals to business objectives in ways that defend budget requests. 50% - It s difficult to attribute marketing activity directly to revenue results to justify budgets. 81% - It s a struggle to assess how well brands perform across platforms and devices. If marketers had a greater ability to track ROI, more than 75% would increase spending in cross-channel efforts and individually in mobile, online advertising, TV and other traditional channels. 75 % 3

MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 5 3 1 Align Goals To Business Objectives Determine Metrics Methodology 2 Identify KPI s Calculate ROI Setup a System of Measurement Analyze & Refine 6 4 Learn how you can manage your entire digital experience without limitations. BRIDGELINE.COM MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 4

1 ALIGN GOALS TO BUSINESS OBJECTIVES 5

STEP 1 ALIGN GOALS TO BUSINESS OBJECTIVES DEFINE GOALS & TIE THEM TO ACTIVITIES What digital marketing wins are you trying to prove? Perhaps you want to show your boss how your work adds value. Or maybe you are the boss and you want to know what specific investments were fruitful and how much to budget next quarter. Start by thinking of your overall business objectives for a campaign. Then decide what marketing activities you ll employ to achieve these objectives. Next you ll be able to align your business objectives and marketing activities with metrics and goals. For example: To track a PPC campaign, an organization may try to increase new visitors to their site through paid advertisements (goals) to increase sales or conversions (business objectives). Another business may produce blog articles they hope will rank well on search engines for relevant keywords (goals) to increase brand awareness and organic search visits (business objectives). Look at the Consumer Conversion Funnel (right). We ve arranged digital marketing activities by stages. After defining your goals, select an activity from the following stages to track: Attract, Engage, Nurture and Convert. BRIDGELINE.COM CONSUMER CONVERSION FUNNEL ATTRACT SEO, PPC, Adwords, Landing Page Visits, Blog Articles, Social Publishing ENGAGE Personalized Content, A/B Testing, Downloads, Form Visits, Brand Lift, Repeat Site Visitors, Social Media Followers NURTURE Email Campaign Interactions, Segmented Lists, Personalized Offers, Workflows CONVERT Calls-to-Action, Purchases, Form Conversions, Lead Scoring, CRM Tracking, Trial, Demo ANALYZE & REFINE MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 6

2 DETERMINE METRICS METHODOLOGY 7

STEP 2 DETERMINE METRICS METHODOLOGY TRACKING HARD ROI If a marketing activity directly leads to sales or revenue it generates a Hard ROI. Hard ROI Activities, including sales or conversions, show a directly quantifiable impact on your analytics that is tracked as a dollar value. Let s say a new visitor clicks on a PPC ad to complete a purchase on your website. You can measure this direct attribution knowing the value of the PPC ad and transaction generated. The right tracking tools allow you to attach UTM parameters (or tracking links) to different marketing campaigns, thus allowing you to track the Hard ROI stemming from these efforts. TRACKING SOFT ROI If a marketing activity does not directly lead to a sale it generates a Soft ROI. Soft ROI is equally important to track though not as easy to link to immediate financial gains until now. Software today makes it easier to track Soft ROI than ever before by connecting your CRM, website analytics, marketing automation and customer success platforms. Soft ROI is tracked as a lead scoring points system, or can also be calculated using ad spend values needed to generate the same results. BRIDGELINE.COM Hard ROI Examples: Product Purchases Customer Acquisition Website Traffic Email Address Acquisition Conversion Rate Increased Sales Transactions New Leads Generated Coupon Redemption Landing Page Submissions Soft ROI Examples: Improved Brand Lift Improved Brand Reputation and Awareness Increased Word-of-Mouth Advertising Brand Mentions New Social Followers Social Likes, Shares, Comments, Pins Photo Views Video Plays Customer Retention Whether directly or indirectly connected to immediate financial success, tracking Soft and Hard ROI initiatives is integral to the holistic long-term success of your organization and should both be assessed by your marketing team. MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 8

3 IDENTIFY KEY PERFORMANCE INDICATORS (KPI s) 9

STEP 3 IDENTIFY KPI s KEY PERFORMANCE INDICATOR S (KPI s) ACTIVITY / KPI s Now that you have your goal in mind, you need to figure out what metric(s) to track. Key Performance Indicators separate meaningful information from an abundance of data. Have you been successful in achieving specific goals and initiatives? There s a KPI to prove it. Check out the activities and KPI s chart (right) and select the KPI that aligns with your goals so you track progress and prove overall effectiveness in your campaign. SEO / Impressions, Site Visits by Source or Channel, Visit Duration, Bounce Rate, Conversions, Pay Per Click Ads / Page Views, Click Through Rate, Conversions, Cost Per Acquisition BLOGGING / Organic Visits, Return Visits, Bounce Rate LANDING PAGES / Form Submissions, Transactions SOCIAL PUBLISHING / Followers, Engagement, Site Visits, Conversions PERSONALIZED CONTENT / Clicks, Views, Visits, Bounce Rate, Content Shares, Conversions DOWNLOADABLE CONTENT / Downloads, Form Submissions, Clicks FORMS / Page Views, Form Submissions, Traffic Source EMAIL MARKETING / Delivery, Subscribers, Open Rate, Click Through Rate, Conversions FREE TRIALS / Free Trials Redeemed, Lead Source, Trials Turned to Paying Customer DEMOS / Demos Generated, New Leads, Lead Source, Demos Turned to Paying Customer COUPON REDEMPTIONS / Coupon Redeemed, Order Value, Coupon Source BRIDGELINE.COM MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 10

4 SETUP A SYSTEM OF MEASUREMENT 11

STEP 4 SETUP A SYSTEM OF MEASUREMENT YOUR SYSTEM TO TRACK PROGRESS Google Analytics provides helpful data that with some customization can help you draw insights from marketing activities. Digital Marketing Platforms provide built-in databacked insights and multi-touch attribution making it easier to track indirect influences on revenue, like social ROI or content ROI. A marketing platform collects the valuable data points you need and will even alert to you important interactions between leads or when a lead is likely to close. Overall, analyze conversion and attribution activities on a weekly basis to stay on track. Contemplating a digital marketing platform? Choose one that centralizes data from other sources in your cross-channel and cross-device integrated marketing strategy like Google Analytics, Google Adwords, paid media platforms, social platforms, email marketing etc. Tracking the cross-channel customer experience paints a holistic picture so you truly know what activities were most influential in their conversion. Digital Marketing Tracking Tools like Bridgeline s Unbound Platform offer robust reporting capabilities enabling you to track and measure goals over time and optimize campaigns based on changes evident in key metrics. BRIDGELINE.COM MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 12

5 CALCULATE RETURN ON INVESTMENT (ROI) 13

STEP 5 CALCULATE ROI Various Industry Examples 1. A MANUFACTURING EXAMPLE Let s say you re a CMO for Drone Zone, a company that manufactures drones. Your job is to ensure that a new model, The Quadcopter 2000, is priced accurately to cover marketing and manufacturing costs. The Quadcopter 2000 April Campaign ROI What information do you need to capture? Calculate Investment: Social Media Management: $2000 per month Search Engine Optimization: $1800 per month PPC spend: $2000 management + $10,000 ad spend per month = $12,000 per month Email Marketing: 2 email blasts - $800 per month Graphic Design Content Costs: $1600 per month Calculate Revenue: Campaign Sales: $1,000,000 for 500 units sold Monthly Marketing Expenses: $18,200 over one month Calculate Return ($): Return = Revenue Investment Return = $1,000,000 $18,200 Return = $981,800 Monthly Marketing Expenses: $18,200 Calculate ROI (%): The Quadcopter 2000 sells for $2,000 per unit and 500 units were sold during the course of this campaign. To keep things simple we re going to focus on one isolated campaign over the course of one month. For every $1 of monthly marketing expenses, they earned $53.90 back. BRIDGELINE.COM ROI = Return Investment ROI = $981,800 $18,200 ROI = 53.90 or 5390% MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 14

STEP 5 CALCULATE ROI Various Industry Examples 2. A RETAIL EXAMPLE You re a Social Media Specialist for Just Mail It, a company with multiple locations that provides U.S. passport renewal services and sells mailing supplies. A recent social post on Facebook encouraged followers to schedule appointments at the nearest retail location to renew their passport. You ve set up tracking links to track exactly how many people converted from these social posts. Just Mail It U.S. Passport Renewals Campaign ROI What information do you need to capture? Calculate Return ($): Tracking Link Clicks on Social Posts: 15,000 clicks Appointments Fulfilled / Passport Renewals Submitted: 1,750 Passport Renewal Fee: $110 per renewal Graphic Design Cost for Social Post: $350 Comparable Cost of Reach If Using Facebook Ads: $4050 = 15,000 clicks x $0.27 Cost Per Click Campaign Marketing Expenses: $4,350 Just Mail It earns $110 per U.S. Passport and 1,750 renewals were processed during this campaign. Here we will use the comparison method to assign value to an organic social post by what it would cost to generate the same amount of clicks via paid Facebook advertising. BRIDGELINE.COM Calculate Revenue: Campaign Sales: $192,500 = 1750 renewals x $110 fee Calculate Investment: Expenses: $350 Design + $4050 Comparable Facebook Ad Price Expenses: $4350 Return = Revenue Investment Return = $192,500 $4350 Return = $188,150 Calculate ROI (%): ROI = Return Investment ROI = $188,150 $4350 ROI = 43.25 or 4325% Comparing results to Facebook ad campaigns, for every $1 they would ve spent, they would ve gotten $43.25 back. This calculation enables you to assign value to the organic post based on the response it engendered with Facebook followers. MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 15

STEP 5 CALCULATE ROI Various Industry Examples 3. A ECOMMERCE EXAMPLE You manage ad sales for The Fitted Sheet, a home goods retail store that also generates revenue from ad sales hosted on your website at $10 CPM, generates $100 per email for each sponsorship of your monthly email blasts and an additional $2.25 for each email opened. You invested $1500 to boost results by running a Google Adwords campaign and spent $400 to have the email professionally designed. Page Views: 15,000 Email Opens: 3,000 Ad Revenue Per Sponsored Email: $100 per email Google Adwords Spend: $100 management + $1000 ad spend per month = $1100 Email Design Costs: $400 per email Campaign Marketing Expenses: $1,500 Now let s calculate how much revenue The Fitted Sheet brings in through hosting ads on their site and through email sponsorships. BRIDGELINE.COM Calculate Revenue: Page Views: $150 = 15,000 x $10/1,000 Email Sponsorship Revenue: $100 Email Impressions: $6,750 = 3000 opens x $2.25 Calculate Investment: Campaign Marketing Expenses: $1,500 = $400 + $1500 Calculate Return ($): What information do you need to capture? The Fitted Sheet Site and Email Ad Campaign ROI Return = Revenue Investment Return = ($150 + $100 + $6,750) $1,500 Return = $1,000 Calculate ROI (%): ROI = Return Investment ROI = $5,500 $1,500 ROI = 3.66 or 366% For every $1 of expenses through Google Adwords and Email Design, they earned $3.66 back. MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 16

STEP 5 CALCULATE ROI Various Industry Examples 4. A HEALTHCARE EXAMPLE Stirectaripin Facebook Campaign ROI You are a Marketing Director for Stirectaripin, a pharmaceutical company that wants to boost brand awareness on social media for a new medicine called Mirazine. You ve chosen to test out Facebook and will blend organic and paid methods to drive awareness for one month. You ve invested $6,400 to generate 20,000 clicks. Calculate Revenue: Website Visits from Organic Facebook Post: $170,000 = 17,000 lead score increases x $10 Newsletter Signups: $4,000 = 400 lead score increases x $10 Facebook Interactions: $20,400 = 2040 lead score increases x $10 (new followers, shares, comments, mentions, link clicks) Calculate Investment: What information do you need to capture? Campaign Marketing Expenses: $9,400 = $6,400 + $3000 Social Media Management: $3000 per month Website Visits from Organic Facebook Post: 17,000 Newsletter Signups: 400 Actual Facebook Ad Cost Per Click: $0.32 per click x 20,000 clicks = $6,400 Calculate Return ($): Return = Revenue Investment Return = ($170,000 + $4,000 + $20,400) $9,400 Return = $185,000 Campaign Marketing Expenses: $6,400 Calculate ROI (%): Stirectaripin has installed a Marketing Platform that tracks each interaction with website visitors. Each time a contact interacts with them, they boost their lead score by 1. Based on past campaigns, each time a lead score increases by 1, Stirectaripin earns $10 in drug sale revenue. BRIDGELINE.COM ROI = Return Investment ROI = $185,000 $9,400 ROI = 19.68 or 1968% For every $1 of Facebook advertising dollars spent, they got $19.68 back. MEASURING ROI & ATTRIBUTING SUCCESS TO DIGITAL MARKETING 17

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