Measuring Return on Investment (ROI) in a multichannel world
Before now, measuring marketing Returns on Investment (ROI) was difficult due to lack of sophisticated analytics and measurement tools. Many businesses have found themselves unable to justify their expenditure on marketing, advertising, and PR activity as they did not know how much new business or revenue those activities actually generated.
While that has changed with the availability and deployment of many cutting-edge digital tools, the degree of complexity of the modern digital landscape and different marketing channels hasn’t made it a bit less complex nor cumbersome. This is because to measure the success of marketing campaigns today, you have to know exactly which messages and channels are working and how much each one contributed to the bottom line. And you need to calculate this as the campaign runs, so you can fix what’s not working and double down on what is.
We now live in a world where customers can interact with brands through a variety of channels, indicating that there are multiple touch points throughout the buyer’s journey. The question on every advertiser’s lip is: “What channel drives the greatest amount of revenue? What channel generates the most leads? What channel should be attributed to the final sale? How are consumers interacting with those channels? They also need data that would allow them answer questions like: Which social media options do the best buyers prefer? Which TV shows do they watch? What is their preferred email address? In which geographic area do they live? To strategically answer these questions, marketers must analyze consumer behaviour across multiple sources to understand how channels are being interacted with and what value they bring to the department’s marketing efforts.
Interestingly, the emergence of new measurement tools that allow marketers to accurately measure and optimize marketing campaigns across channels has made it possible for marketers to know which audiences are buying and how much they spend in order to maximize ROI.
To reach more of their best prospects, there are modern segmentation tools that can provide invaluable insight that allows marketers to quickly identify who their best customers are, and quickly target new prospects that look like their best buyers. Sophisticated marketing vendors can even track purchasing behaviour using credit/debit card data to determine how much each customer spends.
Above all, applying a unique lift analysis methodology that analyses the change in consumer behaviour directly influenced by ad exposure allows marketers to determine exactly which customers in each channel, both online and offline, purchased as a direct result of the campaign. It helps confirm that the purchase wouldn’t have occurred if the ad hadn’t been seen, and thus provides insight into how the various campaign components are actually impacting Returns on Investment (ROI) so they can adjust their marketing plans accordingly. Using this methodology, an advertiser can accurately track the effectiveness of previously unmeasurable campaign channels such as podcasts/streaming audio.
The methodology also allows marketers attribute exposure to conversions, and consistently measure campaign performance by audience, channel, creative, partner and much more. It lets them know what’s working and what isn’t, and exactly how to optimize their audience, channels, message and more. In the end, what matters is the final result, which is Returns on Investment (ROI).
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