What's Your Advertising ROI?

You've begun advertising and you believe it's paying off. How do you actually know though? Are you under the impression it's successful because your revenue has increased month over month or year over year since you began it? How do you know it's not just from a change in the market, or an outcome based on other changes you've recently made to your product design, website, staff, and so on?

Here are just a few of the ways you can monitor and better understand your advertising ROI:

• Cost (don't forget the profit margin!) - One of the biggest mistakes we witness is when a business / individual only looks at the cost of placing & running an ad (sometimes they don't even look at this), when they should be considering their profit margins as well. Your profit margin isn't just calculated by the cost of developing & creating a "tangible" good either, but any good, including the video, image, etc. you're using to advertise your product or service!

• Seasonality & Trends - Another common mistake we witness when a business / individual reviews their advertising ROI is forgetting to monitor the data trends. When you begin advertising you will undoubtedly check the impact it's having compared to the days, weeks, and months prior to running your ads. However, for almost every industry, seasonality is a very big and real thing - as is the market fluctuation. Here are just a few ways to account for these trends so you can better understand the actual impact your advertising is having on your revenue: check the numerical & % growth you had been receiving the months leading up to your advertising and compare to the month it began, compare year over year growth, research market trends for potential benchmarks on your industries revenue growth and compare to your specific business.

• Sales Cycle - Often times companies / individuals are willing to give their new advertisements a bit of time before they expect to see success. However, especially for those who need immediate results you should always take your sales cycle into consideration when advertising and measuring its ROI. Typically we see the longest sales cycles for products and services that are new to the market, a luxury, or of a high cost. If your company falls into any of those three segments, we'd strongly suggest you consider your length of sales cycle when you measure your advertising ROI.

• Tracking - Probably the absolute biggest and most consistent mistake we witness companies / individuals make in tracking their advertising ROI is literally how they track their advertising - most of the time they aren't! It doesn't matter if you're doing traditional or digital marketing, you should be tracking your advertisements' success. Through programmatic platforms you can measure the success your billboard had in driving foot traffic to your store front, coupon codes and call tracking numbers are a great way to help you track your print, TV, and radio buys, and finally Google Analytics and proper CRM integrations are our favorite way to track your digital and traditional advertising together in one place. Through Google Analytics you can know much more than just what directly led to a purchase, but what contributed to the purchase process, which for many businesses that offer products and services at a higher price point is as important as the final touch point before the sale.

Want to learn more about properly monitoring your advertising ROI, or need help improving it? Contact us today and Let's Do Strategy!