There’s a famous quote in the advertising world by John Wanamaker, the first retailer to place a full-page ad: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Thankfully, Wanamaker’s sentiment about calculating advertising ROI is no longer correct. There are countless ways to track the success or failure of an advertising campaign, and with digital, it has never been easier to connect the dots from an ad buy to the impact on the bottom line.
Here’s how we help our clients measure a campaign’s success using online tracking tools:
At MindFire we use UTM links with every paid digital ad placement. UTM stands for Urchin Tracking Module and if you’ve surfed the web AT ALL in the last few years, you’ve probably clicked on an UTM link without realizing it. To the untrained eye, UTM links look like a long line of words, numbers and symbols in a URL. Here’s an example:
This long string of letters and words contains powerful information that can be used to track how people ended up at a webpage. UTM links add additional information about the referral source, environment, contents and campaign of an ad that referred the traffic to the website in question. The code then sends that data to your website analytics platform where it can be analyzed in greater depth.
The click-through data recorded by UTM links can help you calculate the CPM (cost per million) and CPC (cost per click) of your advertising campaigns. But the main benefit of using UTM links is you can see what visitors did on your site after they clicked on the link. Did they leave right away or spend several minutes on the page? Did they look at multiple other pages, or is there a high bounce rate? Are you attracting a large percentage of new users or mostly returning visitors?
The answers to those questions, in conjunction with the campaign goals, help you determine whether it was a good ad buy and if the message resonated with the target audience. For example, we’ve run campaigns where the ad with the highest cost per click provided the lowest bounce rate. That means even though it was more expensive to get those visitors, they were far more engaged with the content than lower-priced options, so it was a good buy.
We can take the ROI analysis even further by implementing goals and event tracking in Google Analytics. Simply put, goals and events are actions users take on your website that either move them further down the sales funnel or signify a conversion. This could be signing up for email updates, downloading a product brochure, clicking on a contact button, watching a video to completion or making a purchase.
By combining UTM links with goal and event tracking, MindFire is able to accurately track our clients’ ROI right down to the size of the ad that performed the best. Here’s an example:
We are working with a financial institution on a campaign to recruit new business clients. The advertising campaign is being served across three platforms:
In the first month of the campaign Facebook brought in the most clicks by far, with a CPC of less than $1. However, these visitors had a bounce rate of more than 50 percent. That’s not bad, but is much higher than the bounce rate of about 30 percent for the business email newsletter and less than 10 percent for the ad network targeting.
Things got even more interesting when we examined the number of visitors who clicked on the key call to action button on the campaign’s landing page. It turned out that only the ad network placements were successful in delivering visitors who were ready right then and there to take the next step in the sales process.
So while on first look Facebook looked like the top performer with a high number of clicks and a low CPC, the ad network, which was significantly more expensive, was the better buy because it delivered visitors who were ready to convert. If we had just looked at publisher-provided data without taking conversions into account, we would have missed this critical piece of information.
These results are not unusual. If you are just looking at the click-through stats provided by your digital advertising publisher, then you could be making decisions based on cost and total visits instead of what is actually working to bring in revenue.
Developing a tracking and ROI analysis program is a marathon, not a sprint; that’s why we have a team of Arsonists working on metrics and tracking.
While there are some buys that are immediately revealed to be a bad investment, you typically need months of tracking, tests and analysis to determine which media placement and messaging mix delivers the best ROI for your audience. And then, once you’ve figured it out, a new tool comes out that requires more tracking, tests and analysis.
Historical data will always provide great context for developing annual plans for how and where to spend advertising dollars. But in today’s ever-changing digital world, it is important to constantly track, test and analyze all your marketing efforts so your business can get the best ROI possible for its marketing spend.
Interested in learning more about how to measure and track the success of your ad buys? Give us a shout – we’re happy to help!