Renowned retailer John Wanamaker was a pioneer in marketing back in the early 1900’s. “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half,” he quipped. For most of the century this observation rang true. Business owners rarely knew which advertising channels got the best results, so they typically used multiple outlets, and had only the overall bottom line to gauge success.
Today, digital marketing has revolutionized the advertising world. Infinite tracking capabilities built into online ads, emails, and other clicks can reveal a consumer’s buying path, helping marketers identify what’s best for the bottom line.
An Eye-Opener for New Opportunities
- UTM codes, container tags, and conversion codes let us precisely pinpoint the most successful ads
- Display ads allow us to prospect potential customers based on targeted options and browser history
- Social media ads allows us to reach out to targeted communities
- AdWords has redefined pull marketing, putting a business front & center based on a user’s search (voice or typed)
Marketing has reached an intuitive, borderline creepy, state. Consumers are aware of this, and will adapt as they always have. In the past, when advertisers used too many billboards, people began ignoring them. Too many TV commercials; DVRs enabled fast forwarding. More recently, when random ads pop up on a user’s computer, ad blockers get installed.
The good news is targeting can be a game changer for businesses. Today’s consumers notice and respond to ads for products or services that appeal to them. Ever notice that ads you see online generally relate to your interests? Marketers can target audiences, control timing, and leverage multiple channels to entice consumers to buy or act.
How to Gauge Success
As digital marketing techniques change and improve, one constant remains: campaigns can and should reveal important ROI info. The amount of data available is infinite and it’s a good idea to identify some in-depth measures to track over time. But, for the big picture, focus on 3 key pieces of data to gauge efficacy:
- Average revenue per sale – important for setting the advertising budget.
- Conversion rate (percentage) – shows number of conversions compared to number of clicks. Many factors determine a strong conversion rate; overall, a steady increase indicates efforts are on track.
- Revenue – easily the most important data, comparing year-over-year revenue shows a campaign’s success, particularly if campaigns have changed over time.
TIP: A compelling message, creative ad, proper targeting, and timing all must be considered when designing a campaign. Overall ROI, measured over time, is what matters most. Getting caught up with finite data can be detrimental.
Once businesses embrace the ever-changing nature of digital marketing, knowing that customers adapt and interact with campaigns in diverse ways, that’s when growth really happens.