Where does ROI fit in?

Advertising has always been a big boys’ game. The big boys, Chef Boy-ar-dee, for example, have big money and buy big media. TV spots, full page magazine ads in the ladies’ journals… and now search engine placement. The idea was that if you lodge a brand name into a consumer’s mind then you will see an increase in sales. For years it seemed to work… a big company would use a major advertising agency to expensively craft a campaign, they would launch it and then sit back and wait to see if it was worth it. They could wait months, or even years, for the data, but by that time they would have moved on to slay the next dragon. If the agency is pressed about ROI, they will form focus groups and very expensively pan through the data. Smaller companies would do less expensive version of the same: regional or local TV commercials, newspapers instead of magazines… and as far as ROI, it was anyone’s guess. If you could afford it, you took the risk.

But with online advertising, the whole game changed. Here, at last, was the ability not only to target specific markets but also to see exactly what they did when they received the promotion. Did they open the ad? Did they act on it? What browser did they use? What time of day? All these questions could now be answered, the data collected in a detail that was unimaginable until just a very few years ago. Add to this the latest in social media marketing with its ability to track customers’ emotional responses to brands, loyalty to marketing campaigns, real-world behavior relating to said campaigns and you have a data gold mine.

if you know what to do with it. As any CIA analyst will tell you, acquitting intelligence is only a part of the equation;  often, it’s the easy part. Ideally, the data will tell you if you’re on the right track with your marketing activities and serve as a tool to guide your efforts. Ideally, it will help you to avoid pursuing efforts with markets that aren’t giving sufficient return for the investment. Advertising has always been and will always be expensive, and budgets are tighter than ever. Just setting up Google analytics isn’t enough; the data needs not only to be gathered, but also measured and applied. In my next entry I will address some specific ways that you can set up your analytics to work in conjunction with your other marketing efforts, as well as the top things you need to look for  in determining how you’re doing.

Remember, analytics exist to answer marketing questions about the effectiveness of your marketing efforts, the value of advertising and marketing investment and… most importantly… how your customers react.