A recent study shows that although one-third of companies are unable to measure ROI accurately, 73 percent of those surveyed plan to increase their digital marketing budget. Surprisingly, however, marketing spend overall is rising at a slower rate than in previous years.
Why the apparent contradiction? It's simple -- ROI plays a huge factor in allocating funds, and demonstrating increasing return on investments is proving more difficult. In fact, that same study showed that 29 percent of companies surveyed were unlikely to increase their marketing budgets because of this obstacle. For marketing departments frantic to increase their budgets, accurately measuring ROI is crucial.
The trouble with ROI
One of the greatest challenges marketers face, especially in terms of accurately measuring ROI, is the significant impact nonhuman activity can have on the numbers. In fact, 54 percent of online ads don't reach a human audience, which means as much as $37 billion is being wasted worldwide on poorly designed digital marketing campaigns -- a whopping 60 percent of digital marketing spend.
How can you connect the dots between campaign spend and ROI if you're not even sure actual humans were exposed to the effort? It might look like a certain message resonates with your audience because it brings in a surge of traffic or leads. From internal research, however, we know that bots are 80 times more active than humans. In the time it takes a human to click once, a bot can click 80 times. On top of that, today's automatic scripts are far more advanced than scripts of the past, making them harder to detect as they imitate human behavior.
Work with what you've got
As bot behavior becomes more complex, it's hard to be sure that you've filtered your data to only include real people. If you can't trust your data, you can't measure -- much less optimize -- ROI. In a world complicated by bots and crawlers, you'll be hard-pressed to get clean numbers to help your case for an increased marketing budget.
Thankfully, there are a few ways to make your data more accurate -- and make the most of the marketing budget you do have.
Cross-reference the data
To help you ensure the numbers are accurate, find as much cross-referenced data as possible. Look at ad platform results to see how they compare with your own back-end analytics. The way platforms track certain metrics can vary greatly, so do your research before selecting one. Bring in other third-party data, analyzing it alongside your own to minimize the risk of inaccurate data.
Tie in offline transactions
If you have an offline presence, such as a store, a restaurant, or even a landline for purchasing tickets, tie in that offline activity to your digital campaigns. Incorporating information from all facets of your business helps you discover how your online efforts are influencing brick-and-mortar sales. Companies like LiveRamp and Datalogix can assist you with these efforts.
Measure third-party distribution sales
If you use channels like Amazon or Eventbrite to sell products, don't forget to measure campaign effectiveness there, too. Analytics companies with clickstream information can help you measure that by tying your advertising efforts to sales happening on marketplaces and resellers.
Develop deeper KPIs
Purchases are not the only KPIs that can be used for direct response campaigns. Engagement, sign-ups, shares, and follows are all KPIs that can be given various attribution weights. They're vital for new customer acquisition and involvement in the purchase funnel. Have a detailed strategy in place -- with pinpointed campaigns measured against selected KPIs -- to maximize your ROI and increase conversions.
We all know, in theory, that increased brand awareness and engagement leads to more sales, but it can be hard to measure the actual dollar amount marketing delivers.
New challenges, such as more sophisticated bots and crawlers, make it feel impossible to measure the true impact and ensure that your marketing budget will increase. But by using these four strategies to make your data more accurate when measuring ROI, you can make the most of your marketing budget.