How To Track Advertising ROI
How to Track Advertising ROI (Return On Investment)
As an agency that specializes in Internet marketing and traditional advertising we are often asked how we can show tangible results for the advertising efforts we put forth for our clients. Business owners don’t mind spending money to promote their businesses so long as their efforts are fruitful and provide a solid return on their initial investment.
Understanding consumer buying behaviors is an important part of determining what kind of return to expect for their advertising dollars. Before we get into how to go about tracking ROI (Return On Investment), it would do us well to understand the kinds of consumers and how various forms of advertising affect the consumers buying behavior.
Disengaged consumers include all people from all walks of life that are influenced to some degree or another by marketing messages found in traditional advertising mediums. They are disengaged because they are not looking for any particular product or service at the time they are exposed to the advertising. For example, say that you are driving down the road and a billboard promoting a chain of tanning salons catches your eye (as provocative as some of these billboards are – you’d have to be blind to miss them). You are not in the market for tanning, but with the Summer season fast approaching you file the mental image in the back of your mind for something you might consider down the line.
Perhaps you hear a radio commercial, or see a television commercial over and over again for the same tanning salon. Maybe their jingle caught your attention, or the bronze god or goddess that fills the screen burns a mental image into your skull. Either way, you have been influenced by traditional media. Although you are not in the market, you have still been influenced by the advertising.
Passively Engaged Consumers
Are in “shopping” mode. They are investigating products or services and researching the benefits of one product or service over another. It is during this “tire-kicking” stage that consumers are influenced by other forms of traditional media, like: newspaper ads, magazine ads and articles, and direct mail pieces. Usually a good compelling offer and strong call to action can convert these kinds of consumers into buyers. Consistency in the advertising message is a factor in whether or not a buyer will utilize the services or purchase the products offered by the advertiser. Being consistent brands the image in the mind of the consumer and is reinforced through repeat exposure. If the ad appears when the consumer is ready to buy, and provided the offer is satisfactory, the consumer will generally buy.
Actively Engaged Consumers
Actively engaged consumers are ready to buy today. They may literally have a phone in one hand and a credit card in the other. They may have been influenced by other traditional types of media, but currently they are ready to make a purchase and in most cases they are using the Internet to get what they want today. Being online and in front of actively engaged consumers at the point of decision is what makes Internet advertising so effective.
So now that we have a very basic understanding of the kinds of consumers that are out there and how they are influenced by different kinds of media, the question is, as advertisers, “How do we determine where the customers found us to begin with…” and “why is this even important to know?”
Why Tracking Is Important
The best media mix will reach consumers where they are in their buying process. Having a good media mix of traditional advertising and Internet advertising will help you capture your market share. But with a diverse media mix, it is important to determine which kind of advertising is working best for you or not at all so that you can reallocate your budget to mediums that are most effective. Perhaps you discover that your direct mail advertising gives you an 8% return on investment, your door hangers give you a 4% return, and your Google Ads give you a 37% return on investment. You may want to reallocate some or all of your budget to another, better performing medium. The difficulty is tying the individual purchase to a specific medium. How do you determine which advertisement brought you the customer?
How to Track ROI
There are many ways to track return on investment but we want to focus primarily on three of the best ways we know and recommend to our clients. The first is using tracking numbers, and the second is using coupon codes and finally we want to look at landing pages on your website. These two combined will help you determine how many of your customers came from specific advertisements. You can also use these methods to perform A/B tests on specific ad copy to determine which of your ads performs best.
Let’s begin by addressing tracking numbers. Tracking numbers are specific telephone numbers that are tied to a specific advertisement. Let’s say for example that you are running an ad in a local magazine that has a readership of 20K people. The magazine goes out on the first of the month and within days of distribution your phone starts to blow up. You receive 40 calls in the first week from people who have discovered your product or service in the magazine. You confirm that these calls were a direct result of the magazine ad because none of your other advertisements have that same telephone number. The only way a person could call that number is if they saw it on your magazine ad.
Now, let’s say that you put an ad on Google and display another unique number for one ad that is promoting your new line of dog leashes and you use another unique phone number for ads that are promoting your line of faux diamond studded dog collars. You run the ads for a month and you get several calls to each of the numbers. You know without a doubt that the calls for the leashes came from one specific number, and the calls for the collars came from another specific number. You now have a way to track each individual ad by tallying up the calls that come from each of the appointed numbers.
So how do you manage all of this. You don’t want to have spend a fortune on a new phone system and hire an operator to manage all the incoming calls do you? Well, that might just be a good thing, but for many of us it would be impractical to start out that way. Instead, there are many services that provide banks of telephone numbers that you lease for a period of time. Since there are many services out there to choose from you want to pay close attention to what they are offering and the types of metrics they provide. Some have really good online metrics that will allow you to see how many calls a particular number received, how long the call lasted, where the call came from, caller ID information to help you tie the specific call to a specific individual, and even call recording features that help you listen to a recording of the call which can even allow you coach and improve the sales ability of those who answer the phones for your business.
- Google – Yes Google! You can utilize Google tracking numbers to track your ads in Google or on any other medium. The important thing is to find a solution that works best for your specific needs and has the bells and whistles that important to you and which give you insight into your sales.
Another brilliant way to determine which ad is bringing you the bucks in the form of new customers is by tying a coupon code to a specific promotion. Say for example that you put out an ad on the radio and the local host tells the audience to visit your website or call you and use the coupon code “DISCOUNT10” to get a 10% discount off your product or service. Now every product or service you sell tied to the coupon code, “DISCOUNT10,” you know for a fact came from your radio promotion.
This is perhaps our most favorite way of tracking sales. Utilizing your website to help you track new buying customers is a great tool to have in your advertising arsenal. If you create a web page that has a specific form on it or a specific call number, or a specific coupon code you can know without any doubt where your customer came from. We like to use PHP forms that when submitted tell our clients the exact page the form came from! Because we can control the message that our clients see when we build the form we put in a clever little plug about our own company, something like : This Sale Brought To You By Your Friends At Adwebvertising!
It’s a fun reminder to our clients that we are helping them to see a bountiful ROI by giving them the tools to monitor their success.
How Adwebvertising Can Help You Monitor Your ROI
Adwebvertising is a full-service digital marketing and advertising agency. Many of our clients keep us on retainer to manage their advertising and marketing efforts, keep their websites up to date, build new timely, relevant content, create ads, design ads, and so much more. For our Agency Level Retainer Clients we offer a specialized service geared towards helping our clients monitor their ROI. We will work with our clients to put systems in place to track the performance of their ads through each advertising medium, and then meet with them on a quarterly basis to go over the metrics and determine which ads are working the best and where advertising dollars need to be reallocated. Since many of our clients enjoy the white-glove treatment that comes with this service they also know that we handle all of their incoming advertising calls. When an advertiser calls our clients to pitch their advertising opportunity, our clients simply redirect the call to us, “their agency” and we field the call, evaluate the offer, and grade each prospective advertising opportunity. We keep a repository of advertising opportunities for our clients then to choose from to replace poor performing advertising from the previous quarters. Since we do this for many of our clients our repository is growing and the choices are very diverse. The fact is that because of this we are putting together a new site called AdOpportunity.com that will be launched in the not too distant future. This site will categorize the type of advertising by medium and will include our review and allow our clients to comment on their experiences with a particular advertiser.
Tracking ROI Begins With A Commitment
It is one thing to have all the information about where your calls are coming from, but it is entirely another thing to use that information to determine which advertising components are working for you and not wasting valuable resources. If you tally up all the sales that one medium generates and it does not surpass the cost of the advertising, then your advertising dollars may not be well used. The important thing to remember is that when you begin tracking you have to be equally committed to evaluating the results. We can help you with this.
Get In Touch With Adwebvertising Today!
June 24, 2015