Tracking your marketing spend and Return on Investment (ROI) is crucial for success in any business or industry. But with so many media channels and ad platforms how do you accurately track ad budget and measure your ROI?
More often than not, we have businesses coming to us who are spending money on advertising without any clear goals and are not tracking their results or measuring how much value they are receiving from their marketing efforts.
We’ve put together this step by step guide, so you can ensure you are putting your time and money into the right place to achieve your goals and truly understand your online ROI.
1. Set a goal and a budget
Firstly, figure out what it is you want to achieve. If you have a clear marketing goal and budget, it will be easier to track and will stop you overspending.
When setting a budget, not only is it important to work out how much money you’ve got to spend, but also think about how much time you have to spend. Time is something that is often overlooked when it comes to marketing. You might be spending $100’s per month on Facebook ads but how much time are you investing in creating quality content or managing engagement?
Tip: Start small and increase your budget once you have positive results. The benefit of online advertising is that it allows you to start with any size budget, so you can test what works and what doesn’t. Then scale up once you know you’re receiving a positive return on investment.
2. Understand your customer journey
Before you can assign your conversions and measure returns, you need to understand the customer journey. Your customers all engage with your business through multiple online and offline interactions. You need to put a person behind the numbers to determine what the numbers really mean.
For example; to get a new lead via your website, a prospective customer might first see your business on Facebook, like your page, visit your website, sign up to your newsletter, and then contact you before they become a customer.
3. Define your conversions
Conversions reflect your business goals, they are what you want people to do when they come across your business.
They must be quantifiable to help you understand what is working and what is bringing in the most leads, giving you a good indication of where to increase or decrease your budgets.
Don’t simply assume that 1 conversion = 1 customer. You will need to track a range of conversions to measure the different points of your customer journey.
A conversion can be anything that can be recorded on your customer journey, including;
- An online purchase
- Contact form submission
- Phone call
- Social engagement
- File download
- Time spent on website
- Number of pages visited
An online purchase or contact form submission might be your end goal or (macro conversion). However, the other types of conversions, such as a Facebook like or time spent on website are often very important steps that build up to the final conversions (micro conversions).
4. The difference between micro & macro conversions
A macro conversion is what you regard as the most valuable online conversion, like an ecommerce sale or an online enquiry through your website.
A micro conversion is less valuable but could ultimately lead on to a macro conversion. An example of this might be an e-newsletter signup or visiting a particular product page on your website.
It can be tempting to only track the most important conversions, such as those that bring in revenue or enquiries, however this won’t show you the bigger picture. Recording micro conversions can give you more insights in to the nature of macro conversions. You can see the relationship between all your different conversions and determine which is the most and least successful.
Tip: Make a list of all the key engagements people have with your business online. Once you have all these interactions you can separate them into micro and macro conversions. Over time, you will be able to see which micro conversions are most valuable to your business by determining which ones lead to the most macro conversions.
5. Track your conversions with Google Analytics
Google Analytics tracks all traffic on your website, so you know who is visiting your website, where they are coming from and what they are doing on your website (tracking micro and macro conversions). You cannot use Google Analytics without your own website and you will need help from your web developer to set up Google Analytics.
Share your marketing goals with your developer so they can help you track the right micro and macro conversion. Here is a good tutorial video that explains more about setting up goals in Google Analytics.
Tracking website traffic is crucial but it’s a waste of time if you don’t do anything with the data. This data is where all the value in online marketing comes from and the analysis of this data is a continual process that helps to make sure your marketing budget is always being invested as efficiently as possible, so you can come up with tangible actions to make improvements.
Tip: Set up Google Analytics from Day 1, check your data regularly (at least monthly) and organise it into reports, so it is easier to read and see trends over time.
6. Track offline conversions
It is clearly important to track your online conversions, but what about the offline experiences? The problem is, in the real-world customers experience your business through a combination of online and offline interactions. A customer may see an online ad but end up making a purchase in store or ordering over the phone. Without tracking offline conversions, you’re simply not getting the full picture.
The simplest way to link online interactions to offline conversions is through the use of promo codes. By including a promo code in the ad copy a customer simply needs to quote the same promo code in person or over the phone for you to know exactly where to attribute the sale.
Tip: Google Analytics can also track QR codes or custom URLs though the Measurement Protocol. This works by assigning a unique User ID and tracking these conversions back to an online event. Google Analytics can even record data from phone calls and in store point of sale systems.
