Posts Tagged ‘roi’
Tuesday, April 3rd, 2012
The bane of any marketing consultant is the question about proving social media’s ROI. An easy answer is to compare social media with newspaper advertising. It’s difficult to prove ROI on either, however, many business owners, possibly because of their distrust of the Internet, have a fascination with trying to prove there is a solid return on any online investment in social media marketing.
If you’re business owner, I suggest you check out an infographic that has appeared on Pinterest. A little tongue in cheek, it still makes some valid points about social media marketing and ROI. The infographic makes some interesting points, for example:
- social media measurement is a priority
- most marketing people don’t know how to calculate social media ROI
- lots of people are talking about
- justifying ROI is becoming even more important
It goes back to my point above – management insists that marketing people justify their efforts by showing a clear ROI. They, in turn, are looking for metrics that can be used in a formula to do just that. The problem is, it’s hard to create a formula that includes intangibles like word-of-mouth advertising, brand awareness, the benefits to a business, or a businesses overall reputation (not to mention the saving of a reputation).
Are you an ROI small business manager? Whilst there are many areas where you can measure ROI in a business, there are some areas where it’s just not practical. The best you can do is measure year-on-year growth, and to treat social media marketing like any other form of marketing. I asked in an earlier post “Are You Over Analyzing Your Small Business?” – this is a classic case of over analyzing a business.
Wednesday, August 3rd, 2011
For years, large companies like Coca-Cola, McDonald’s, and ExxonMobil have spent millions of dollars simply to maintain a positive impression in the media. They weren’t so much concerned with the coveted ROI on advertising campaigns as they were with branding themselves and achieving top-of-mind awareness.
When you establish a new advertising campaign – whether it be through pay-per-click services, outdoor advertising, print media, or any other medium – you should outline your goals. Are you looking for ROI or would you be happy with branding effects?
If ROI is your main concern, then you have to think about your budget. Being the top spender in your market segment may mean that you lose money on your advertising. But it could mean that you achieve huge branding success. Which is more important to you?
PPC is like any other advertising medium. You can figure out which price point per click will yield the greatest ROI on your advertising efforts or you can try to own the advertising space with a PPC branding campaign. If you opt for the latter, be prepared to pay top dollar for clicks. Sometimes, your customers come from other places on the Web because they noticed your PPC ads when they conducted a search.
PPC for branding isn’t for the faint of heart. You must ensure you have the budget for it or you may as well go home.
Sunday, October 17th, 2010
Many new pay per click advertisers get wrapped around the idea that their ad needs to be in the No. 1 position to be effective. Nothing could be further from the truth. In fact, studies show that the No. 1 position is often not the best position. For one thing, to get that position you have to pay some pretty hefty click prices for many niches. And those prices could scale you right out of your ROI.
Which brings me to my next point. The best PPC position is the one that will maximize your ROI. In other words, where will you make the most profit on sales achieved from your clicks on that position?
That’s a difficult question to answer and it can only be answered through tests. You have to raise and your lower your click bids until you arrive at the best position then fight to keep it. And the best position for you may not be the best position for someone else. It all depends on the effectiveness of your ad, the effectiveness of your landing page and the price of your clicks. Test, test and test some more.
Ideally, all of that said, the best positions for many advertisers tend to be Nos. 2-4 on page 1 of the SERP. Why are these the best positions? That’s a good question.
Typically, the first position is owned by a big brand that is in protective mode. They’re more worried about keeping their market share than increasing business. For them, the ad is as much about keeping the name brand front and center than about getting click throughs. If it achieves that purpose then they consider their PPC campaign successful even if it loses money. As a small business you can’t afford to do that.
Your goal should be to spend as little as possible on each click to obtain the highest number of conversions at the highest possible price for your product. If your product has a low profit margin then you don’t want to spend too much on click prices. Settling for a lower position may actually produce a high profit margin for you.
So what’s the best PPC position? It depends on a number of factors, all of which have to constantly be tested.
Saturday, June 12th, 2010
Twitter has acquired a company that offers analytics and that can be good and bad. It’s good if you want to measure the ROI of your Twitter strategy. But it’s bad if you come to find out that your Twitter strategy is a bomb. Or that could be good if you can turn it around.
Analytics is a very important tool for marketing. And marketers love to measure things. Especially ROI.
One of the biggest questions I get as a Twitter user and a consultant that recommends Twitter to a good number of my clients is, “What is the ROI of Twitter?” It’s not an easy question to answer.
ROI is to Twitter as sales are to your company telephone. Or ROI is to your phone service. You can use your phone to make sales, but you can also use it to order a pizza, which takes money out of your pocket. Do you factor that into your telephone’s ROI?
Your Twitter ROI boils down to one thing: You can’t measure the ROI of a tool – and Twitter is a tool – but you can measure the ROI of a strategy that tool is used to implement. Start a telemarketing campaign and you can measure your ROI. Start a Twitter marketing campaign and you can measure your ROI. But you need a measurement tool and that’s where the analytics comes in.
Twitter acquiring an analytics company can be a good thing. If it helps you measure your Twitter marketing strategy ROI then it’s even better.
Tuesday, March 30th, 2010
The beautiful thing about marketing your small business online is that you have multiple channels to get your message out to people. I mean, theoretically, you have an unlimited number of channels. But realistically, you have to pick and choose. Which ones are more important?
There are some criteria that you should consider for discerning the most important online marketing channels for your business. Here are a few things to think about when making your decision:
- Relevance – Which channels are relevant to your business? By relevance I mean that the type of audience you are trying to attract will see you there or the channel provides you with some search engine optimization benefit.
- Accessibility – How accessible is the channel to you and your marketing team? How about your intended audience?
- Cost – Not all online marketing opportunities are free. Some may actually cost you something. Is it affordable? Even more importantly, will affect your ROI positively?
- Search Engine Indexing – Today, search engines will only index and rank up to two pages per website for each keyword you are targeting. That means that your exposure is limited even if in a small way. That can be made up by having your message in more than one place. It is becoming much more important to target the verticals like video, news, blog and other search indexing verticals. Target as many as are relevant to your business and that meet your other online marketing criteria.
- Time intensiveness – How much time does it take to manage the channel and what is the pay off in spending that amount of time on the channel? Some channels are much less time intensive with a higher pay off; I’d recommend spending more time on them and less time on the time intensive channels with a low pay off.
When considering each channel for your online marketing plans, analyze each channel according to these criteria and only use the channels that promise a good return on your time and cost investment.
Friday, February 5th, 2010
What if you knew that 20% of the e-mail that you sent to opt-in subscribers wasn’t reaching its destination. Would you change the way you look at your ROI? According to recent statistics from Return Path, you should.
This poses two issues for e-mail marketers:
- How can you increase deliverability?
- What is the correct measure for determining ROI?
Obviously, you can’t count bounced e-mail as deliverable. The problem seems to be, however, that we’re all getting more bounces than we believe we are because some of the e-mail we think is getting through isn’t. And we’re not getting an undeliverable report on the return. That most definitely affects ROI.
As an example, if you send 100 e-mails and you have a bounce rate of 10% then there’s an additional 20% that you should include in the bounce rate. Instead of 90 deliverables you should only count 72 deliverables. That’s a 72% deliverability rate. If you close an average of 25 e-mails from that 100 then you don’t have a 25% conversion rate nor is it 27.7%. Rather, your conversion rate is 25/72, or 34.7%.
Why is that significant. It’s very significant because if you can figure out a way to decrease the undeliverables then you’ll make more sales. Now the question for savvy e-mail marketers is, How?
Saturday, June 21st, 2008
Loren McDonald of Email Insider wrote a great post on the difference between direct mail and e-mail marketing. The gist of the post hinged on the following points:
- With e-mail marketing the consumer runs the show
- E-mail is more complicated
- Performance, ROI, and overall success are measured differently
- E-mail can appear differently to the recipient than it does to the creator
I concur with all of these points. One thing I’ve noticed about companies attempting to do e-mail marketing for the first time: They always think it will be easier than it is. Because e-mail is inexpensive (re: free), the thinking is that it will be easier to perform an e-mail marketing campaign. But honestly, there’s a lot more to think about.
CAN-SPAM laws are one very important thing you must consider. With direct mail marketing, you won’t be penalized for sending unwanted and unsolicited mail as long as what you are sending it legal. With e-mail marketing, you can be banned from your ISP and lose your e-mail account if you get too many spam complaints. That changes everything.
Another thing you have to think about is how often you send out e-mails. Too often and you’ll get blocked by recipients. Not often enough and they’ll forget about you. With direct mail, too often just costs you a lot of money.
When it comes to e-mail marketing the ease and low cost of it can be deceiving. Many companies do not accurately track their costs because many aspects of it are seemingly free. For instance, how much time does it take you to put together an e-mail that you send out? That’s a cost that many business owners do not consider. It does affect your ROI.
One more thing to consider is your audience. E-mail marketing and direct mail marketing work differently for different demographics. People who might respond to e-mail would just throw you mailer in the trash before even looking at it. On the other hand, some people who might read your direct mail brochure would hit the delete key on e-mail without reading even if they’ve opted in to your list.
There is no sure way to know whether direct mail or e-mail marketing is best for you. Chances are, you can benefit from both types of marketing depending on your goals and the individual campaign. For a consultation on your marketing needs, contact Small Business Mavericks.