3 Ways to Improve ROI With Better Marketing Cost Management
There are several “free” strategies, avenues, and tactics you can explore as part of your overall marketing plan, but these approaches are only free if you don’t value the time you’ll be spending on incremental improvements. They’re also going to be inherently incomplete, especially in this era where so much of what is shown on the internet is subject to fickle algorithms that are increasingly difficult to crack.
Source: Zac Johnson
This also doesn’t mean you should be mindlessly throwing money at the problem either. You can easily spend hundreds—or even thousands—of dollars on a marketing campaign and have practically nothing measurable to show for it at the end.
You need to be smart about how you spend your marketing budget, and this means you need to determine how to maximize your return on investment (ROI). The following three insights can help get you started in the right direction.
1. Focus on the metrics that matter
You’re likely already somewhat familiar with the concept of setting S.M.A.R.T. goals. These goals are specific, measurable, attainable, relevant, and time-sensitive. It’s important to consider all five elements, as that is how you’ll be able to determine whether or not you’ve actually achieved your goals. The “R” for relevant is perhaps one of the most critical elements, because achieving a meaningless goal won’t actually help you in the long run.
It is incredibly easy to get completely caught up in what are called “vanity” metrics. These are the kinds of facts and figures that may look good on paper, but don’t actually do anything to boost your bottom line. A good example of this is attracting more followers on Twitter. It might look nice that your company Twitter account has thousands of followers and you might then deem your marketing campaign a success.
But what if a sizable proportion of your followers are just bots and not real people? What if a good proportion of your followers only started following you to enter a contest, for instance, and they’re not actually interested in buying your products or services? Then the number of followers you have is just for you to feel better about yourself and not about actually growing your business.
Instead, focus on the metrics that matter. Do those added followers actually result in more subscribers and greater sales? Do they lead to bigger opportunities where you can take advantage of improved economies of scale?
To best measure your ROI in this respect, it pays to utilize A/B split tests for your online marketing efforts. This way, you can figure out what landing pages (for example) work better than others. Crazy Egg has a list of many split testing tools you can try; Google has what it calls Content Experiments, which actually allow you to run up to 10 full versions of a single page.
2. Fight click fraud
Google AdWords (and AdSense) is easily one of the biggest and most popular ad networks on the internet today. Competing platforms like Bing Ads operate in much the way, and while it is a bit of an oversimplification, it is generally true that they operate on a pay-per-click (PPC) basis.
What this means is that every time someone clicks on one of your ads, you have to pay for it. It comes out of your budget. Depending on the level of competition in your niche and the keywords that you are choosing to target, this could be anywhere from a few pennies to a few dollars. Spread over dozens, hundreds, or even thousands of clicks (depending on the size of your operation and budget) and you can see how these costs can add up quite quickly.
To this end, while it might look good that your ad is getting a high click-thru rate (CTR), it doesn’t really mean anything if those clicks don’t actually result in the conversions that you are seeking. (Refer to tip #1 above.) And a potentially big culprit for a poorer conversion rate is when those clicks aren’t legitimate to begin with.
They could be bots and other software programs and scripts that never had a chance of converting in the first place. They could be competitors who are seeking to deplete your ad budget so that your ad placement doesn’t actually get seen by potential customers. Ad networks usually have some protections in place to protect against click fraud, but they are inherently imperfect and incomplete.
One of the most powerful tools for fighting against click fraud is ClickCease. Integrated directly with your Google AdWords or Bing Ads campaigns, ClickCease will automatically detect fraudulent clicks and prevent them from destroying your effective ROI. It fights against bots, your competitors, and click farms, too. You can set custom detection rules and review comprehensive reports with information on each and every click.
3. Pinpoint your target demographic
This is especially applicable on platforms like Facebook where you have a high level of access to audience demographics, but the strategy can be just as easily applied to other platforms where you have varying levels of targeting available to you. One of the first and hardest lessons you need to learn in business is that not everyone is going to be a customer. That’s just a fact.
Taken at the simplest level, if you are a local business that only serves customers in the Seattle area, it is a complete and utter waste of your budget to have ads displayed in front of visitors in Albuquerque or Wichita. This may sound obvious, but it becomes less obvious—and equally important—when you’re looking at other demographic characteristics.
Are you targeting the right age group? Marital status? Income level? What about whether or not they have children or if they’ve expressed interest in international travel? Should you be focusing most of your efforts on men or women? The temptation is to cast your net as wide as possible, but this becomes ultimately self-defeating from an ROI perspective. You’re not maximizing your efforts on the specific demographic that is most valuable to your particular business.
No, it will not be immediately clear what age group or keywords you should target. That’s where the split-testing mentioned earlier comes into play. The more experiments you run and the more data you have, the better equipped you are to define exactly who your ideal customer is.
Remember that the Pareto principle says that 80% of your positive outcomes will come from 20% of your efforts. Focus on the 20% that will actually benefit your business the most.
Increasing your ROI and boosting the effectiveness of your marketing campaigns is a task that never ends. Remember, there is always room for improvement.