Merchants are more interested than ever before in ROI from their marketing investment.
In fact, a BIA/Kelsey survey shows that while merchants plan to spend more on marketing and advertising in 2013, they will use fewer channels, keeping ones that show measurable results and cutting out channels that do not.
Click Through Rates (CTR's) are clearly not enough.
So how can local media prove measurable ROI for most campaigns? We recommend three simple steps: First, decide what units will be measured as a conversion. Second, estimate what each conversion is worth. Third, show results.
Taking one at a time:
1. Decide what will be measured. This happens at the start of the selling process. Here's a quick list of types of digital conversions from Amie Stein, Director of Training and Development, Local Media Association:
• Email Registrations
Every local media should be able to create a simple landing page, web page with email capture, or contesting platform for a merchant's campaign (if you don't have this capability, see technology resources at MediaExecsTech.com for technology endorsed by other media companies).
• Social annotations
Many merchants who understand marketing are also trying to grow their own social "audience" of potential customers, so they can post offers via social networks at a future date. The key measurements for this strategy is in the likes, follows, and fans.
• Phone calls
Other businesses want appointments and phone calls are the key metric for measuring response. Call trackers are numerous and inexpensive (for options see MediaExecsTech.com).
• SMS opt-ins
Some merchants who supply fast food, salon services, events or any kind of sale may want to build a text club to communicate with customers to receive repeat business. Even the most hard-boiled marketing old-schooler will often invest in this simple "show me the money" solution. Advertise short codes on any media, including inhouse marketing, or click to opt-in from mobile display.
• Cost per Aquisition Programs
Google AdWords specifically has a cost per acqusition program, which places code on e-commerce check-out pages to track conversions. This provides the most "black and white calculation of ROI," Stein said.
• Visits to the contact, conversion page, and thank you pages of the merchant site
For companies that sell tickets, other online items or offer coupon redemptions, Google Analytics can track the path of referring traffic to these pages, or use post-click activity trackers such as TruMeasure or any of the providers at MediaExecsTech.com. TruMeasure creates a mirror site to track and report clicks and has phone call tracking included, so it's an Editor's Pick for this space.
Stein recommends asking for access to Google Analytics on the first sales call to establish a benchmark to measure traffic increases.
"Even if its a 60 day close cycle, 60 days prior to closing establishes benchmark."
Some marketers view increases in site traffic as a key measurement, but small business owners are more likely to focus on measurement tools that immediately translate into dollars and sense.
Notice that none of these measurement strategies involve Click Through Rates (CTR). CTR's are indicators of the relative performance of ads, but do not measure real value or ROI.
Step 2 - Estimate what a conversion is worth
Once conversions are measurable, some merchants are satsified. To validate ROI, however, requires getting more information from merchants and doing the math for them.
Use the ROI calculator attached above (it is in both xls and xlsx), or follow these steps:
a. Ask the merchant to estimate what percentage of leads captured (by emails, texts, fans, etc.) will turn into customers over the next year.
b. Ask the merchant to estimate average annual worth of a customer.
c. Agree on what a "success is" based on the merchants answers. Some merchants will be happy to get more fans and emails. Others will want coupons redeemed and a few will insist that full ROI is calculated to the penny.
When this conversation takes place at the start of the selling process, you can put goals and criteria into the proposal.
Always reinforce that the calculated ROI does not mean that the last action is the only value to the advertising campaign.
Even "customers who search Google are looking for the brands they want. When brand recall happens, they will select you," Stein says.
"If you have done the job wholistically, building brand awareness, the likelihood of them following through is greater. The conversion is just a piece of the entire purchase cycle."
Step 3: Show results
There are now a slew of integrated dashboards like Clickfuel and others at MediaExecsTech.com, besides Google Analytics to show results.
However, fully calculating ROI requires estimating annual revenues produced by the performance tracked.
Use the attached ROI calculator (above) to show the full revenue value.
The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and MediaExecsTech, developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine, to showcases perspectives from around the world on new topic each month, translated from and to the top five languages in the world.