Proving return on investment (ROI) in the world of digital marketing can be challenging. However, with the right tools, it can catalyze growth extensively.
To start, check below. Have you implemented these tools into your digital marketing strategy? Is your content built to actually improve ROI or are you just going through the motions?
It’s time to find out.
Why Are There Hurdles? What Is the Gap?
Most of the time, companies invest a lot of time and money in digital marketing and social media; however, they are unable or do not have the bandwidth to analyze data.
According to research performed by TrackMaven, marketing professionals are not aligning their key performance indicators (KPIs) with their sales goals and they do not have analytics tools to measure these KPIs.
In order to successfully prove digital marketing ROI, we need to understand the top hurdles, which I’ve outlined below. Luckily, most of the hurdles digital marketers face can be overcome by implementing effective strategies.
1. Lack of Technology Resources and Willingness to Spend Money
While most agencies are willing to spend money on marketing-related technological resources, the same cannot be said for companies with in-house marketing teams, who aim to get as much done as they can with a smaller team and budget.
There are numerous tools out there, free and paid, to help you effectively analyze big data. In order to prove certain metrics, especially ROI, you need to invest your time and money into some of these marketing analytics products to effectively analyze growth across all marketing channels.
You know what they say: You need to spend money to make money!
With that being said, there are many free analytics tools that have the ability to, if set up correctly, provide you with quality data that can assist in proving ROI. Tools such as Google Analytics, Facebook Ads Manager, Twitter Analytics, and others can help you to determine if your return on investment is worthwhile.
2. Attributing Social Media and Content to Revenue
How can someone post a piece of content on Facebook or Instagram or Twitter and be able to place a dollar value on that post? That doesn’t seem very intuitive, does it?
Sometimes, digital marketers claim that attributing social media content to revenue is the biggest hurdle in proving ROI. This is due to the differing costs of posting different forms of content, as well as the ambiguity of what is deemed “quality content” (especially in the form of a picture).
Without the necessary tools, it is difficult to understand how much money you must attribute to the number of impressions, likes, clicks, or comments a particular post has, because each social media platform measures content differently. For instance, influencers on Instagram get paid based on the number of followers (impressions) they have, whereas Twitter values the number of retweets and likes (engagement) a particular post has.
One way to attribute social media and content to revenue is by forming an attribution model—a way for you to determine where credit is due for revenue and conversions during a certain length of time.
Simply, if you add up social media staff salaries, social media outsourced work, social media technological investments, social media advertising costs, and social media content creation costs, you can determine how much you spent and how much revenue came from that source of spending.
Although this method isn't 100 percent exact all of the time, it's a good way to determine ROI, and you can always back it up with Google Analytics.
3. Creating High-Converting Content Experiences
Similar to directly attributing social media content to revenue, creating high-converting content pieces can be difficult but necessary in order to prove the value of digital marketing. Unfortunately, it can be hard to develop content highly specific to the user, and investing in a wide range of content creation services can be pricey.
One way to create a high-converting content experience is using the Uberflip platform, and particularly their AI functionality. AI-driven content software gives you the ability to leverage user intent and machine learning data to predict what kinds of personalized content pieces users are more likely to convert on and what kinds of interests they have.
This can be helpful in numerous ways. For example, think of the way you discover new music on a platform like Spotify. If you are the type of person who enjoys country music, and you listen to it frequently, they are able to determine similar music you may enjoy and create a playlist from this.
As a midsize-to-enterprise B2B business, you may want to direct your customers to certain related articles or webpages utilized as part of a conversion funnel. You can use the power of AI to determine which content pieces are more likely to get someone to click and move down the funnel, increase your user interaction, and maximize user experience, ultimately increasing ROI.
4. Aligning KPIs and Metrics to Business Goals
Key performance indicators can vary across different departments within a company, and aligning KPIs to business goals can sometimes affect the ability to measure ROI.
For instance, if you are a non-profit for ecological preservation, your business goal may be to increase overall awareness of ecological preservation; however, your digital marketing KPI is measuring for conversions for general donations through your website.
Although you are able to measure ROI, your KPI does not necessarily align with your business goal.
On the other hand, say you are the same non-profit with the same business goal. This time, the digital marketing KPI is to measure impressions on Instagram for your posts regarding ecological preservation, and the metrics used are the number of impressions and likes per post.
Although the KPI and metrics align with the business goals, there is no real way to prove ROI here because there is no finite way to attribute each dollar spent to the increase of awareness.
The key takeaway here?
Align KPIs with a range of strategic goals. Ensure KPIs are not just with one specific performance goal, but rather a wide range of performance goals within the business’ strategic plan.
5. Attributing Leads to Revenue
The norm for generating leads in the B2B space has shifted from primarily focusing on lead generation to focusing on revenue generation from high-quality leads. In order to accomplish this shift, the industry has seen a large increase in digital marketing investment. With this, a need for revenue attribution has risen due to the necessity to maximize ROI.
There are three key steps to overcome the hurdle: tracking, connecting, and crediting.
Tracking is merely taking note of every time there is a touchpoint (times the potential lead is contacted), which can include email, phone call, and video chat.
Being able to determine the average number of times it takes to generate a lead can be valuable data for sales teams to maximize ROI and minimize wasteful communication efforts.
Connecting is being able to piece together these touchpoints in order to determine the path to revenue generation. If you are unable to create a clear path between all touchpoints, it may be impossible to attribute revenue to a specific touchpoint.
Crediting, which is the final step, occurs when revenue attribution is applied to a single touchpoint (a piece of blog content, for example) or a group of connected touchpoints.
6. Collecting and Analyzing the Right Data
In most analytics tools, a large data set will be formulated and the amount of data, especially in big data sets, can seem overwhelming. In digital marketing, data creates consumer insights that are essential to track success.
Data collection methods may vary; however, the ability to determine the correct data to collect is imperative.
When presented with a digital marketing task, you must be asking the correct questions:
- Who am I trying to target?
- Do I need qualitative or quantitative data?
- How long do I need to collect data?
Proactive data analysis is another crucial part of digital marketing. Most of the time, the C-level management team does not have time to analyze large sheets of data. Therefore, effectively analyzing and reporting data can make or break a digital marketing strategy.
7. Determining the Right KPIs to Measure
As we discussed, it’s important to align your KPIs directly to your business goals. By doing this, you can hone in on a smaller number of metrics, which can successfully prove these KPIs.
Depending on your industry, there are various KPIs that may align with your business. For example, if you are an enterprise B2B business, KPIs such as the number of quality leads, website traffic, and social media engagement may be helpful in determining the successful performance of your business goals.
What can a poor choice of KPI do to your business? Being unable to effectively measure your business performance can cause you to miss key indications of business struggles, and in turn negatively affects your business in the long run.
Minimizing the number of KPIs to two or three can help you measure exactly what you need in order to determine performance. Overcomplicating this process may slow down your ability to make decisions and effectively run your business.
To Enhance Digital Marketing ROI, You Have to Be Forward-Thinking
As analytics tools advance, and as fresh technologies are created, new customer insights will be available at the palm of our hands. Google is constantly updating their algorithm and marketing platform. Facebook has been optimizing their advertising platform. Companies like Moz and Hotjar are providing unique customer insights through newly developed tools.
One new customer insight that I think will be extremely valuable in 2019 is the increasing value of voice in search marketing. With Google searches becoming mobile first, we can expect to see an increase in the focus on voice search as well.
SEO tactics will begin to shape around voice technology, and there will be an increase in the importance of long-tail, educational keywords.
Proving ROI can be difficult, especially when you may not be able to invest in the technology necessary to get the job done. Attributing revenue to social media posts, blog posts, and content creation seems to be the biggest hurdle. While there are tools available, there is still an experiential and technical gap that needs to be addressed both in the educational system, as well as in the professional world.
If you are able to do this, these hurdles will become that much easier to overcome.