ROI for Inbound Marketing | Measuring KPIs for Digital Marketing Results
By Jeremy Flinn, Chief Marketing Officer
With the aggressive increase of companies investing in digital marketing, the question is what is my return on investment (ROI) on these inbound marketing services? Before we start to break down the different metrics to determine the success or failure of digital marketing services, we have to discuss what was collected or measured from the dominant marketing actions prior to exploring the digital marketing realm. This typically leads us to print and TV. Once the question is reversed on a company’s marketing team, the ability to measure anything marketing related comes into question. The fact is TV and print are extremely difficult, if not impossible, to gauge the detailed analytics such as impressions, direct actions taken, and associated sales. This isn’t a bash article on TV and print, in fact, some specific arenas have some of the most effective TV and print campaigns ever! Think of TV shows like Game of Thrones or The Walking Dead, and the almost cult following they have created. What has slipped is the ability to reach consumers with brands through these channels. Take for example this year’s Super Bowl. How many commercials can you actually remember as impactful? Turn back 10-20 years and you can easily recall the first time seeing the Budweiser frogs or FedEx Cavemen. Things have changed and thus companies are looking to digital engagement for more impactful marketing. In order to determine something as impactful, you have to be able to measure the results. That’s where the various digital marketing “key performance indicators” or KPIs are sought out by marketing and analytic teams.
ROI for Digital Marketing – Defined
When most business-minded people think about the term ROI, they instantly gravitate towards a monetary attribute. That could be anything from gross sales to cost per acquisition of customers. These areas are incredibly important KPIs when evaluating the success of any inbound marketing campaign. However, with the increase popularity in strategies such as social media marketing and content marketing, there is a myriad of other metrics that can be monitored and evaluated to determine successes of the digital marketing campaigns. When discussing the KPIs of social media marketing we can discuss organic growth (likes), total impressions, total reach, and total engagement. Those all are very relevant and important but don’t be afraid to expand on that to include what is the true “means to the end” for social media – getting people to your website. How many people came from Facebook to your website? Twitter? Instagram? Of those, how many navigated more than one page? When you evaluate a marketing campaign’s success you must look at it holistically with regards to your end goal, which on inbound marketing, is getting in front of potential consumers and sending them to your website, products, or services. Each of these attributes can tell us a lot of the success or failure of the campaign, as well as tell you a lot about your customer and their behaviors.
Digital Marketing Measurable Key Performance Indicators (KPIs)
Measuring KPIs in arenas like digital ad buying (display ads) and search engine marketing (Pay-Per-Click), are a little more standard than some of the other inbound marketing services. Standard metrics are noted like impressions, click thrus, click thru rate (CTR), and contributing sales. A note to be cautious on with display advertising KPIs, is to make sure to cross reference what your advertising platform provides in terms of numbers with your Google Analytics account. Hopefully you have created a trackable link when you created the campaign so that you know where the traffic is coming from. Often you will receive “inflated” numbers, particularly clicks to a website. This is an easy metric to cross reference with Google Analytics and determine the number that truly reached your website, content, and products. The same is said for Pay-Per-Click (PPC) advertising thru platforms like Google AdWords and Yahoo/Bing. You can easily pull data on all of the above and even conversion rate and cost per conversion, if you set up conversion code on particular pages of the website. It will sound like a broken record, but Google Analytics will become your main source to pull KPIs, you just have to know what to look for in the complex, informative system.
Determining Digital Marketing ROI “Success”
With all that said, what the hell do we consider “success” for these metrics of digital marketing? I mean if it’s not directly generating dollars in the account; how can we really say we are succeeding, let alone say there is a ROI, on the inbound marketing services implemented? You’re right, at the end of the day you aren’t paying the office rent/mortgage with pageviews, and last time I tried, my employees were not a big fan of direct deposit of visitor sessions. OK, maybe that was a horrible attempt at digital marketing comedy, but the fact is cash is king, right? It is, but all of those KPIs lead to money in the bank! In other words, all of the indexes (in the form of KPIs) that we are tracking and working so hard to improve are the means to an end. That “end” is a customer for our service or product. The more customer visits (sessions) to a website, the more they look at the brand, services, and products (pageviews), and longer they are impacted by our company content and products/services (time on site) the more likely they will become a customer! In the end, the stronger your digital KPIs are, the stronger revenue flow will be. It doesn’t matter if you make revenue via advertising, eCommerce, or at retail, the bottom line is nearly 70% consumers are starting the buying process online. This initial step may be a long (or short) way from the end (buying) depending on the purchase, but it very much is true about “the first impression is everything.” Those with little unique content to engage with, will lose customers on the brand, products, and services and fall short ending up a Plan B or C. You only come to success if Plan/Company A falls through! Don’t be second fiddle.
The world of digital and inbound marketing is unbelievable, and primed for attack if you know what you are doing. No matter the size of your company, you can be competitive. It’s so much more than who has the most ad presence, it’s about who is the authority in their niche. Don’t try to be everything to everyone. Focus on your areas of interest, and then record and analyze your digital marketing KPIs. Let the numbers do the talking, and lead you to greater revenue in the bank account.
Jeremy Flinn is Chief Marketing Officer of Stone Road Media, and an entrepreneur. Founding several successful companies in the outdoor industry, Jeremy works with over 15 companies in the outdoor industry to improve their digital marketing KPIs and increase revenue streams.