If you own a company or a brand it is important to thoroughly consider a marketing strategy. A theory posits that if you organize your marketing activities in ways that fit the implementation requirements of a business’s strategy it can enhance performance (Vorhies & Morgan 2013). Another theory states that ‘Monitoring performance provides one informational means to help planned marketing activities produce desired results‘ (Jaworski 1988, p. 24). That means that it is not only important to consider your marketing strategy – you also have to measure it’s performance.
For your company it would be wise to consider online marketing. It has been found that content marketing can generate up to 3 times as many leads as can traditional outbound marketing while costing 62% less (CMO Council 2016). Companies spend a great amount of moneys on online marketing. In 2016 global spending in US dollars is predicted to be around $197.48 billion (Statista 2016). At the same time total global amount of marketing on all platforms is suspected to be around $606.9 billion (eMarketer 2016) so online marketing is about 33% of the total amount. Soon it is expected to be the largest advertising segment (PwC 2016).
Picture 1. Predicted Internet Vs. TV advertising in 2017
But when spending all this money on online advertisement, the most important thing to think about are RESULTS. Are you making the best possible use of your limited budget? Are potential customers responding to your online advertisements? And how do we know that – by Measuring!
According to Ambler (2000) companies should establish and regularly review both external and internal market metrics. At eMarketer you can read about how poor measurement systems were a big reason for lack of online engagement. As said in MITSloan (2010) ‘every manager’s goal should be to move away from fuzzy measurement and toward quantifiable Metrics. That way, a manager can understand what’s working and what’s not – and revise the approach accordingly’ (See Picture 2). If you can not or do not measure it, you can not know if it’s working or not.
Picture 2. Stratetic Options for Social Media Measurement
There are many possible ways to measure online marketing performance and here are my 5 favorite online Marketing Metrics:
1. Return on investment (ROI).
Many see this as the single most important aspect of any marketing campaign because it’s the only one that demonstrates profitability (Forbes 2014). A positive ROI shows that your online marketing is effective and a negative ROI indicates that something is wrong. The main idea here is that if every new customer pays more than the cost of acquiring him by advertising you’ve generated a profit and your online marketing campaign is a success.
2. Social Media Engagement Rate
When you use social media you should always track your performance by measuring engagement over reach. On social media engagement can be considered gaining likes, comments, shares and more. The most important thing is that people are actively engaging with the brand. A huge key to Facebook and Twitter marketing success is to do everything possible to get engagement rates up because a high engagement tells the networks that your content is worthy of being seen by more users (Marketing Profs 2015). As can be seen in picture 3, with higher engagement rate, cost per click becomes less expensive.
Picture 3. CPC Discount vs. Engagement Rate
3. Bounce Rate
If a visitor leaves your page before clicking on any links, he is considered to have bounced. The bounce rate therefore shows the ratio of visitors who leave the website before exploring it further. The lower the bounce rate the more likely visitor are to convert to customers (Forbes 2014).
4. Cost Per Lead (CPL)
Cost Per Lead is a metric that shows the ratio between the lead conversion of a particular campaign and the corresponding cost. That way it gives insights on how profitable the campaign is (Digital Marketing Philippines 2016). It is important that the website and its content convert traffic into leads or paying customers at a minimum cost.
5. Search Engine Optimization (SEO) Metrics
It is important to keep track of SEO efforts. One way is ‘Keyword Performance & Rankings’ that shows your website search engine rankings for specific keywords which helps determine the competitiveness, performance and success of keywords. Another is ‘Organic Traffic Sources’ which is the percentage of people who find your site by clicking on your website on the organic listings of a search engine page and that percentage should be higher than 40%. The third and maybe most important way is ‘Organic Conversion Rates’ which shows the amount of people who completed a desirable action on the website and found it through organic search result. (iSpionage 2016)
If you are seriously thinking about online marketing you should get familiar with all these Metrics – as well as considering the many other Marketing Metrics that do exist. Find the ones that suit your company goals the best and use them.
Student ID: 215415783
CMO Council 2016, Facts & Stats: Internet Marketing, CMO Council, retrieved 23. May 2016, <https://www.cmocouncil.org/facts-stats-categories.php?category=internet-marketing>.
Digital Marketing Philippines 2016, 14 Most Important Metrics to Focus in Your Digital Marketing Campaign, Digital Marketing Philippines, retrieved 23. May 2016 <http://digitalmarketingphilippines.com/14-most-important-metrics-to-focus-in-your-digital-marketing-campaign>.
eMarketer 2016, Total Media Ad Spending Growth Slows Worldwide, eMarketer, retrieved May 23. 2016 <http://www.emarketer.com/Article/Total-Media-Ad-Spending-Growth-Slows-Worldwide/1012981>.
Forbes 2014, 10 Online Marketing Metrics You Need To Be Measuring, Forbes / Enterpreneurs, <http://www.forbes.com/sites/jaysondemers/2014/08/15/10-online-marketing-metrics-you-need-to-be-measuring/#3bd7691b355f>.
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Jaworski, B., J. 1988, Toward a Theory of Marketing Control: Environmental Context, Control Types and Consequences, Journal of Marketing, Vol. 52, No. 3, pp. 22-39.
Marketing Profs 2015, Four Online Marketing Metrics That Actually Matter, Marketing Profs, retrieved 23. May 2016, <http://www.marketingprofs.com/articles/2015/27590/four-online-marketing-metrics-that-actually-matter>.
MITSloan 2010, Can You Measure the ROI of Your Social Media Marketing, MITSloan, retrieved 23. May 2016, <http://sloanreview.mit.edu/article/can-you-measure-the-roi-of-your-social-media-marketing>.
PwC 2016, Internet advertising – Key insights at a glance, PwC, retrieved 23. May 2016, <http://www.pwc.com/gx/en/industries/entertainment-media/outlook/segment-insights/internet-advertising.html>.
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Vorhies, D., W & Morgan, N., A 2003, A Configuration Theory Assessment of Marketing Organization Fit with Business Strategy and Its Relationship with Marketing Performance. Journal of Marketing: January 2003, Vol. 67, No. 1, pp. 100-115.