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  • Writer's pictureAnnie McEuin

Evaluating your ROI

Updated: Oct 24, 2022

You've taken the time to carefully vet and hire an experienced marketing company and worked tirelessly to perfect your logo and build your brand. You've spent days scrolling through competitor websites to ensure yours is reflective of why your company should be chosen above the rest and now you're ready to allocate your budget dollars to paid advertising and position your company at the top of everyone's mind. One problem... how do you know the money spent on paid advertising is worth it?

My years of experience in the agency world has taught me that you have to have a clearly set goal in order to judge whether or not you have a good return on your investment. Any digital marketer can get you clicks to a website, that's the easy part. As a marketing solutions company, our mission is to go beyond what is expected from an ad campaign and to align our advertising strategy with your success measurements. It's time to move past the simple measures of success typically reported on such as clicks and impressions, and adopt a broader view of a campaign's success.

Ultimately, what most business owners expect from an advertising budget is to increase the bottom line. According to a study by Forbes Insights and The Trade Desk, 53% of CMO's expect an increase in revenue from ad budgets. But how do you know that the increase is from your advertising budget? How do you know which channel or tactic has the impact that drives sales or earns new customers?

Digital advertising has become the most informative, and often the most misunderstood channel of advertising. Never before have we been able to directly report back on which ad made the sale, who the customer is, where they live and what they are interested in. Carefully utilizing the information we know about our current customers to reach new ones is just the beginning of the journey towards the sale or conversion. The ultimate goal is to know which advertising and targeting strategies are working and which should be adjusted. This is accomplished by testing new ways to reach an audience and is only valuable if you have a clear way to measure success that is determined before an ad ever hits the mobile device.

Attribution modeling has become the new prize marketers sell to ensure that we have the right tools to help any client understand where their customers are coming from that convert. However, all too often conversion actions are set up to show an ad budget is successful, when in fact, those conversions never led to an actual sale or a new customer. By definition, a conversion is the act of changing something to a different form. In the case of advertising, it's the act of changing a non customer into a customer. Conversions should be determined to show that a user has taken the steps to change into a customer. What does that look like for your business? If you have e-commerce on your website this is an easy answer because you can easily track a purchase from your website. If you don't have this type of website or business structure, determining a conversion can be more challenging. Perhaps it's signing up for an email, a contact form submission, a catalogue download, or a phone call. Counting a conversion too early in the funnel can be missed opportunity to reach that potential customer because we've already counted them as converted when they were really just slightly interested.

Evaluating the ROI from this point is all about determining how much that conversion is worth to your company.

  • Do 20% of all customers that sign up for an email go on to purchase products or utilize your services?

  • Do you get a sale from one out of every 5 contact forms or phone calls?

  • How many times does a customer typically utilize your business before dropping out of your revenue stream?

  • How much money does this typical customer spend and how much of that actually becomes gross revenue for your company?

Knowing the answers to these questions is key to actually determining your return on investment. It is essential for your business to know how much a customer is worth to your bottom line to and equally important to evaluate every piece of the equation in order to determine your ROI.

At Above the Noise Marketing Solutions, we believe in a data driven approach to meeting your company's goals. We will work with your team to understand the customer journey, establish valuable conversions and help to ensure that the advertising strategy we recommend is providing a positive return on your investment.

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