5 Tips To Better Measure Your Online Marketing ROI
Investors typically use a fairly uncomplicated criterion to evaluate their chosen investments. If, for example, an investment increases in value over time, it was sound. If, on the other hand, its value falls, the investment in question may have been ill-advised and is now worth purging.
Unfortunately, this commonsensical approach to evaluating a personal investment isn't employed nearly as frequently as it should be when it comes to measuring a return on investment -- or ROI -- in online marketing.
It's no secret that both small and gargantuan companies have begun using social media to such a degree that it now constitutes the bulk of many firms' entire marketing efforts. And because a great deal of online marketing via social networking platforms can be done at little or no cost, the concept of measuring your "investment" is frequently overlooked.
How Much Bang Are You Getting for No Bucks?
If a small business owner drops $10,000 on a major metropolitan outdoor billboard campaign, there's an excellent possibility that he or she would subsequently document every last detail regarding how that sizable investment yielded -- or failed to yield -- any worthwhile results. Regrettably, because platforms like Twitter and Facebook are largely free to use, small business owners who utilize social media often don't take a fine-toothed comb to their online marketing efforts. And in that oversight you'll potentially find more than a few lost dollars.
So where do you begin to evaluate their return on investment -- of time, money, resources, faith, or just about anything else -- in online marketing? Consider these five tips.
1) Are People Talking?
Perhaps the biggest misconception about social media-rich marketing campaigns is that they don’t have to be "noisy" to reflect their success. Simply maintaining a presence online, some mistakenly believe, means you're making waves and getting noticed. In reality, if people aren't talking about your online efforts, sharing your Facebook posts, re-tweeting your comments, or recognizing your work in any perceptible or consistent fashion, it's probably safe to deduce that your online marketing strategy isn't resonating.
2) How Much Are You Learning?
Evaluating ROI involves carefully considering just how much you're actively learning about your customers, competitors, and the industry in which your business operates. A worthwhile return on investment not only translates to concrete sales and marketing successes, but also substantive educational opportunities that could -- and mostly likely will -- materialize in dollars and cents down the road. At the end of the day, your usage of online marketing is sub-par if it fails to produce actionable data and other valuable information worthy of acknowledging or incorporating into your business and marketing strategies.
3) Numbers Don't Lie
The most basic mechanism by which you can measure success in online marketing is a simple metrics tool like Google Analytics. But any effort to comprehensively evaluate your marketing ROI must extend beyond tallying traffic counts and the number of your Twitter followers. Instead, look for correlations between metrics data and recorded sales. Did sales on a particular date, for example, spike in relation to social media efforts made at or around the same time? At the heart of measuring ROI is finding direct connections between varying degrees of marketing efforts and the extent of their impact.
4) Regularly Reaching Benchmarks
No matter how many digits are found on your monthly web traffic report or sales receipts, your ability to reach increasingly more ambitious benchmarks -- e.g., Twitter followers, first-time customers, etc. -- is fundamental to intelligently assessing your marketing ROI. Incredibly, an astonishingly low number of small businesses actually establish a marketing benchmark schedule to compare regular analytics data against. If you're similarly without one, there's no better time than now to establish a benchmark schedule.
5) Gut Goes a Long Way
The importance of reading your gut instinct in measuring ROI cannot be understated. Chances are, if you feel less than satisfied by the outcome of your online or social media-related marketing efforts to date, there's probably good reason for that perception. Despite the apparent ease with which some deploy digital marketing campaigns, there is no shortage of obstacles in gaining ground in online marketing. But by thoughtfully considering on a routine basis the ways in which your efforts are working -- or coming up short -- not only will your ROI improve, so will your instincts about the strides you're making.
Michael Essany is a business writer for Intuit and is passionate about solving small business problems.