Regardless of the industry, we all strive for higher and higher return on investment -- ROI -- in our campaigns and other endeavors that drive marketing revenue. Logic would dictate that we spend the minimal amount while attempting to achieve the highest possible return. Yet striking just the right balance for optimal returns takes some strategic planning, a few educated calculations, and maybe even a little luck.
On its face, it stands to reason that the more insight and visibility you have into your customers, your marketing revenue, and their data, the more efficient and streamlined your processes and the more value you can generate for your organization. But what exactly does that trajectory look like or entail? What kind of visibility should you have? And how can you leverage your insights to not only ensure but increase your marketing ROI?
There is no magic formula. Because every organization's business needs, objectives, and challenges are unique, so too is their pathway to generating value and higher returns. That said, for many organizations, that recipe for success often shares common elements that include visibility, insight, action, and attribution. In order to give ROI a healthy boost, organizations will have to find a way to strike just the right balance that works best for them.
There are a wide variety of Key Performance Indicators (KPIs) that marketers can use to assess the value of their marketing initiatives. But at the end of the day, soft metrics (like brand awareness) do little to illustrate ROI from your efforts.
Metrics that focus on marketing revenue are musts in today’s digital landscape. According to a recent study:
CMOs and other managers want to know what drives marketing revenue and ROI?
Most like to take a simplistic view, citing financial buy-in, a better understanding of the customer journey, and analytical insights, among other things. But marketing ROI is as multifaceted as the digital space it exists in. There is a combination of correlated factors that affect and help illustrate ROI. Miss one of them, and you’re missing the whole picture.
Achieving maximum visibility is one of the biggest challenges marketers face in the digital age. At the same time, it’s one of the most important factors for success. The more visibility you have into your audience touchpoints and how they’re interacting with your ads and brand, the easier it is to understand which elements of your campaigns are working and which aren’t.
Whether it be content type, target keywords, platforms, channels, or bidding strategies, more visibility means more useful KPIs. Nearly every kind of business has a multi-touch sales cycle where simple campaign attribution strategies come up short.
That’s why the most serious marketers agree there’s a need to invest in tools and technologies to gain visibility beyond what advertising platforms themselves have to offer. And the greater your lead volume, the more opportunities there are to optimize your strategy and improve ROI when you have more visibility.
Luckily, there are a variety of tools out there that help you gain broader visibility, allowing you to customize and prioritize the data most important to you. The best tools will summarize holistic cost and performance data across channels. They’ll also include dashboards with instant reporting and built-in trending that you can personalize within the interface.
Of course, visibility is only the first piece of the ROI puzzle. However, oftentimes using the software and integrations that provide the most data about your audience also serve up the most noise. More visibility is always better, but only if you can gain actionable insights from it. And while visibility is essential, it’s only the first step.
So how are you supposed to turn this bank of data into actionable insights that drive ROI? Also, how are you supposed to attribute certain data points to the revenue changes you’re seeing?
Data ≠ insights. Once you have broad visibility, your next challenge is make sense of the data it provides. Indeed, while many businesses understand the value of and invest heavily in business analytics, the vast majority of companies are unable to leverage big data to their advantage:
So when assessing the value of analytics technologies for your business, don’t focus on data volume alone. You’ll only be able to maximize ROI from the insights you glean, not from data.
Instead, you need to be able to answer important questions like:
Ultimately, your ROI will come from the changes you make to your marketing strategy based on the insights your business analytics provides. If you’re unable to draw actionable insights from your data, then there’s no real link between visibility, insights, and ROI for your business.
It’s also important to note how the quality of insights you derive affects ROI. Even the most basic analytics reports from AdWords or the like can offer some insights for long-term strategy improvement. Most often, these limited reports do little more than point out gaping holes in your strategy, or big mistakes that waste your ad spend. Make these changes, and you’re left wondering what other minute adjustments you can make that will have a huge impact on ROI overall.
Serious CMOs need analytics technology that captures the whole customer journey and provides actionable insights to drive ROI.
In order to capture revenue-driving insights from your analytics, you first must track every possible interaction in your customer journey. Once you have this visibility, use it to understand important points about your audience. You can:
It’s important to gain these insights and track performance in both the long and short term. Making adjustments to improve your customer journey is relevant annually, monthly, weekly, and even daily. And the age of your insights is an important factor for potential ROI impact.
Meanwhile, the average SEM program actually spends with 18% inefficiency on keywords with few clicks or conversions -- representing a lot of wasted opportunity and room for improvement. While data-savvy managers can capture some revenue-driving insights from analytics reports, new data is coming in all the time. It’s humanly impossible to keep up with and act on the minute changes in data insights in the short term. However, these seemingly small gradations in data are actually the biggest opportunities to improve conversions and reduce wasted ad spend, driving more ROI in the process.
Again, it’s in your technology. Use business analytics software that automates data analysis and can derive important insights for you. AdWords has made major steps in the past few years to fill this need, introducing artificial intelligence (AI) technology to suggest campaign changes to your team. But it still lacks the visibility most businesses require, deriving less valuable insights as a result.
In truth, the best quality insights come from analyzing a full database of information in real-time, using a technology that learns from and predicts future performance. The most advanced options use machine learning to map out for you where your performance is headed given the most recent data points.
If step 1 is achieving broad visibility, and step 2 is deriving insights from your data, then step 3 is making informed adjustments to better optimize your marketing strategy. These are all tactics that can help you maximize your marketing revenue return and realize more ROI. And again, the speed and scale at which you can make changes from your insights will impact their value immensely.
Contrary to popular belief, top industry marketers aren’t relying on teams of data scientists and advertising managers to make minute campaign adjustments around the clock. They use automation. In the advertising realm, you can use business analytics automation to:
In order to truly maximize your ROI, you need to have processes or technologies in place that broaden your visibility, help you derive key insights, and assist you in quickly acting on these insights for greater effect. You should automate what you can, but also use a technology that has the features and flexibility for you to develop your own optimization strategy based on your own data analysis.
In the end, the process of obtaining more ROI from your business analytics circles back around to visibility. You need to be able to fully and accurately attribute your ROI back to the optimizations you’ve made based on your data insights. Otherwise, you’re simply making adjustments that you believe should increase ROI without actually knowing if they actually do.
Digital sales funnels are complex, and there are a lot of factors that can cause leads to convert or fall out. It’s best not to assume your optimizations are the most effective strategies available to you. There very well could be other, even more, relevant changes you can make to maximize ROI. Accurately attributing your efforts allows you to channel in on this.
But most marketers still struggle with this, either by lack of understanding or lack of necessary technologies. According to The Lenskold Group, nearly two-thirds of companies don’t use tracking or simple single attribution models.
It’s your job to ensure your conversions and lead nurturing efforts are attributed to the right campaigns. There’s no best way to do this because each business has a unique sales funnel with disparate touchpoints and value for its bottom line. That’s why the best approach enabling the most visibility and understanding is to customize your campaign attribution strategy.
Don’t rely on first touch, last touch or other pre-defined attribution strategies. Create an attribution approach that works best for you. Leverage a technology that allows you to use any attribution method -- even from third-party software -- to gain better insights.
Complete visibility means gaining insights that are both broad and granular. Beyond the individual campaign level, you also need to measure the impact of your efforts on your ROI long-term (quarterly, yearly, etc.). That’s because adjustments with a short-term impact could also lead to significant gains later on. Full visibility means also having a clear understanding of the combined and weighted impact of your campaign performance long-term.
Even ignoring the benefits of proper attribution for maximizing ROI potential, most marketing managers understand the importance for buy-in. So often businesses invest in advanced analytics technologies but are unable to (A) make sense of their data, or (B) prove that their data insights are directly responsible for increasing revenue. Marketing managers understand that both these things are essential if they want to garner long-term buy-in from higher-ups in the business.
There are a lot of technologies out there that give you the tools you need to broaden visibility, insights, and even ROI. Very few assist you in gaining the understanding and attribution reporting you need to illustrate that it’s worth the investment. The best business analytics software is equipped to illustrate their value for you, making your job a whole lot easier in the process.
Of course, gaining a deeper understanding of your audience’s demographic makeup, needs and behaviors has deeper implications for your business -- and not just about gaining insights to improve your marketing efforts. Deeper, more accurate insights can impact many different aspects of your business, from communications and customer service to product development.
Understanding what channels, platforms and content are most effective with your audience makes it easier to cater to their needs. At the same time, understanding the marketing climate, developing a strong positioning strategy, and launching effective ad campaign strategies are all key factors for new product success.
Visibility and insights don’t just make better marketers, they make better businesses. Because the better you understand your audience, the more opportunities you’ll have to be customer-centric. The implications for ROI are significant when you focus on your customers in all areas of business, marketing or otherwise.
Maximizing marketing ROI isn’t a linear process, it’s a circular one. You need a combination of distinct elements working harmoniously to achieve it. Altogether, you need:
When it comes to maximizing marketing ROI, you can’t have one of these elements without all the others -- they all fit together to create a sound ROI strategy that is bigger than the sum of its parts. Instead of starting with visibility and working your way through each step, start with the big picture. Invest in an analytics software that has the ability to assess a holistic picture of your unique marketing environment, while providing all the features you need to gain visibility, find insights, take action and attribute your efforts. By figuring out how all these pieces fit into the entirety of your marketing strategy, as well as how expanded visibility and insights lead to elevated ROI, you’ll ultimately be creating processes and strategies that can be repeated and built upon, setting you up for even more successful campaigns down the road.