Measuring your marketing

Detailed measurement of your marketing spend and return on investment is more crucial than ever. Today, there is a wealth of free or low-cost tools to help you establish a more efficient, data-informed marketing strategy.

Marketing pioneer John Wanamaker once famously said: “Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.”

A century later, a surprising number of companies are still in the dark. A recent Roundpeg survey found that less than 40 percent of the small businesses surveyed measured their ROI in any way. Even more companies measure their marketing inadequately. An alarming number of marketing decisions are still made by instinct – despite the many tools available to business owners today – which leads companies to throw away money on low-ROI marketing activities.

According to a recent McKinsey analysis, an average of 15 percent to 20 percent of marketing budgets could be reinvested or returned to the bottom line without losing marketing ROI. That means an estimated $200 billion of global marketing spend could be put to better use each year.

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To eliminate your portion of that wasted spending and ensure your marketing dollars achieve the maximum impact, it’s crucial to measure everything you market. By compiling your measurement data, you’ll increase your market knowledge and illuminate which prospect groups, marketing messages and media channels are most influential for your business. This will save you money in the long term by helping you to invest only in efficient and effective marketing initiatives.

Although marketing analytics has connotations of being difficult or expensive, today’s tools can streamline data collection and analysis for a reasonable cost. A marketing-analytics dashboard, for example, uses data about financial performance and marketing initiatives to determine where the two overlap. The patterns that emerge on the dashboard makes it clear which marketing initiatives have the highest ROI, enabling companies to reconsider their marketing strategy to maximize profitability.

In addition to leveraging the appropriate tools and dashboards, you should also make sure to focus your attention on a handful of key performance indicators that will gauge the ROI of your marketing initiatives. These KPIs will serve as your barometer and guide for the success or failure of all marketing efforts.

Standard KPIs that should be at the core of all your analysis and decision-making include Return on Ad Spend, Media Efficiency Score, Net Promoter Score, Paid Search & Email Click-Through Rates, and Paid Media Cost per Point.

By using these KPIs and leveraging the appropriate tools and software, you’ll be well on your way to adding quantitative rigor to your marketing efforts. This increased discipline is invaluable to guide future decisions and to take the guesswork out of optimizing your hard-earned marketing dollars. n

Chris Ciunci is founder and managing partner of Tribal Vision.

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