I come from a background in financial analysis, so I’m always thinking about the bottom line. Measuring the return on investment (ROI) from your marketing budget can sometimes be elusive though.
I come from a background in financial analysis, so I’m always thinking about the bottom line. Measuring the return on investment (ROI) from your marketing budget can sometimes be elusive though. How do you measure your marketing? Let’s start with the basics.
Marketing is everything a company does to acquire customers and maintain a relationship with them.
(Sales Growth - Marketing Cost) / Marketing Cost = ROI
This is an easy calculation, but it makes a big assumption. It assumes that all of your marketing budget has contributed to your sales growth. That’s not exactly realistic when you have a sales team and multiple marketing campaigns in different places (online, print, etc.). So how can we can we truly know if we’re spending money where we should?
One of the easiest ways to know how your marketing budget is working is though promo codes.
Let’s say that you’re advertising for the first time and you are trying to decide which market is better for your business – New York City or Los Angeles. You can use promotional codes in your advertising like NEWLA and NEWNYC to track which market is more responsive to your message. In this example you would want to make sure you’re using the same messaging to reduce the number of variables in your test.
This isn’t new. Marketers have been doing it for decades, but we still see lots of businesses forget to use this simple strategy. Don’t overcomplicate things if you don’t have to.
There is a mythical promise that we can track anything on the internet. That’s one of the reasons there’s been a huge rush to advertise online in the past decade. There is some truth to the claim, but recent calls for privacy protection are making it harder to track what people are doing online.
According to Auren Hoffman, CEO of SafeGraph, less than 20% of all marketing data is accurate. “If you buy location-based ads on people that have been to Burger King recently, you are going to end up targeting 80% to 90% of people who were driving past Burger King, at the store across the street from Burger King, or even 200 meters away from Burger King.”
This isn’t to say that online marketing data isn’t valuable - it may just be less accurate than you think. As marketers and business owners we have to use what’s available. You’re never going to have perfect information, so it’s best to track what you’re doing in multiple ways.
There are many schools of thought when it comes to how you should spend your marketing budget. It’s always best to consult a professional before making any big marketing decisions. Reach out to us if you have a question. We may be biased, but we also work with clients in over 30 different industries.
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Nowadays, everyone has a laptop or a mobile phone. People spend on average over 3+ hours online using a mobile device on various social media platforms (e.g. Facebook, Instagram) or browsing the internet through search engines (e.g. Google, Bing).
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