In a recent blog post, “Marketing White Belt: Marketing ROI,” Christopher Penn offers some excellent insight which digital agencies can use to accurately track return on investment (ROI) from marketing activities.
T
he formula is fairly basic: (Income Earned from Marketing Efforts – Marketing Expenses)/Marketing Expenses = ROI). For examples and how to factor in costs associated with time, read Penn’s full post.
For this formula to work, digital agencies need to encourage clients to invest in a good customer relationship management systems (CRMs) to track which product or service was sold, the cost and the marketing channel that drove the sale.
The next step is to integrate marketing channel tracking tools that communicate with the CRM. Penn recommends a website analytics package, such as Google Analytics, which can provide the CRM with a site visitor’s traffic source and web activity.
To track offline conversions, he recommends surveying customers and statistical sampling. While these activities can be useful, they also tend to be fairly general and not always accurate. For example, if you ask a new customer about how they found your client, they may say Google, but that won’t tell you what keyword they searched, or if they clicked on a PPC ad.
An alternative option that more accurately tracks offline conversions is call tracking. Through a call tracking solution, you assign a unique phone number to a specific marketing channel, and then it automatically records every time that number is called. It also associates the offline conversion with its online traffic source and website activity data, such as last page visited, and then communicates this to your web analytics and CRM programs.
Using Call Tracking in a Campaign
Following are some ways digital marketing agencies use call tracking solutions to monitor offline conversions:
• Pay Per Click (PPC) — With call tracking, markers can associate a unique phone number with a specific PPC campaign or keyword. Traffic source data will help the call tracking solution distinguish between paid and organic search, and then show the appropriate tracking number to the visitor based on path to site.
• SEO — For organic keyword traffic that results in an offline conversion, marketers simply need to assign a unique number to a specific organic search term and search engine. Traffic source data will tell the call tracking solution which number to show, and then track any calls from that keyword.
• Email Marketing — To associate offline conversions with an email newsletter, marketers can assign a unique phone number to the email marketing campaign. This number is integrated into the newsletter to capture conversions that do not visit the website. For those that do, the call tracking solution will automatically show the appropriate number on the site to visitors that click through.
• Social Media — Simply assign tracking numbers to traffic that comes from a specific social networking site, such as Twitter or Facebook, and visitors from those sites will see the corresponding number. It’s important to also assign the same number to any third party application used to manage social media participation, such as Hootsuite, because traffic source data may appear differently.
• Offline Marketing Channels — To track conversions from offline marketing activities, assign a unique tracking number to each ad campaign, flier, tradeshow booth or any marketing channel where your call to action is a phone number. The offline conversions that result will be associated with these activities and accurately recorded in your CRM.
When to track ROI
One other important point Penn makes is, “ROI is not the ultimate measure of marketing performance. ROI is an objective metric (an end-game metric that tells you if you’re there yet) only if cost containment is a priority for your marketing. If you are in a growth mode with an objective of capturing significant market share, ROI can actually be a hindrance to your marketing efforts because over-focus on it will prevent you from taking short-term losses in exchange for long-term potential gains.”
This is a great point. Marketers should not be 100 percent focused on ROI when marketing objective is growth. Most marketing takes time to start generating return, especially content generation (i.e. blogs, ebooks, white papers) and social media. Think about other success factors aside from monetary, including blog subscribers, social media followers, inbound links and content downloads.
That being said, the information collected through web analytics and call tracking solutions is still highly valuable to understand how marketing channels are converting, which are improving and which are driving highly qualified website traffic. The better you can understand campaign performance, the better equipped you will be to make campaign updates and allocate budgets, which ultimately will lead to better marketing return results.
How are you tracking marketing ROI for your campaigns? Please share your methods in the comments section below.
The report allows the Google Analytics user to clearly see the correlation between spot broadcasts and site visits and conversions. As rich as the overlay report is, a simple solution exists that allows Google Audio Ads advertisers to track phone calls driven from their radio spot campaigns.
