Digital marketing is a must have for every business today and for many, it has almost completely replaced traditional ways of marketing. Still, research tells us only 34% of businesses have fully implemented digital marketing as part of their overall strategy.
Why is this?
The landscape of digital marketing is changing as fast as it’s growing. New channels, formats and tactics are popping up faster than you can try them out. It’s no wonder many businesses struggle to decide where to spend their marketing dollars with so much to choose from.
So how can you tell what’s working and what’s not?
Many companies tend to use multiple platforms and agencies to buy their marketing services from, each of them reporting metrics specific to that particular execution. Click through rates, likes and engagements don’t tell you if your campaign has actually generated any leads or sales.
According to HubSpot’s State of Inbound report, proving ROI and getting more budget are the leading challenges marketers face. As budgets are spread across more and more channels, it’s absolutely vital to be able to measure your activities and keep investing on what’s working while at the same time testing out new tactics to keep ahead of the game.
On this blog post, we will focus on the single most critical marketing metric; conversion. It will help you get started measure your activities and calculate basic ROI for your marketing efforts.
So what is a conversion?
In a nutshell, it means getting your visitors to take the desired action, whether that is to buy your product, sign up for your newsletter, register for a webinar, download a whitepaper, or fill out a lead/contact form.
If you’re not tracking any of these now, I would suggest you focus first on the last measurable action before your visitor becomes a paying customer. For many, this is a quote/contact submission or a direct sale if running an e-commerce business.
How do you track and measure it?
The most common way to track online conversions is using Google Analytics. This is done by creating a Goal to track specific actions on your website.
Let’s go through the basic steps to create one.
Goals can be found under View column in Admin menu.
To create a new goal, simply click New Goal button.
Enter a name and type for your conversion. Let’s say we’re tracking conversions for a contact form, we could name it “Contact form” and set a type to “Destination” to trigger goal on thank you page.
In destination field, type in your thank you page URL.
Click “Verify this Goal” to make sure it’s working. This will show the conversion rate based on the past 7 days.
Activate goal by hitting Save.
Repeat the steps for the key conversions you want to track.
Google Analytics is now recording conversion data for your new goal and you’ll start seeing it in your reports.
Conversion by source or campaign
With the goals set for your key conversions, you can now start tracking the performance of your individual marketing efforts by channel or campaign level.
To see quickly what channels are generating most conversions navigate to Aqcuisition> Overview view.
If you have linked your AdWords account to Google Analytics, you can see all your campaigns with conversions directly under Aqcuisition> AdWords view.
To track the performance of ads and links outside AdWords you need to use Custom Campaign tracking in your URLs. To create a campaign tracking URL you can use Google’s URL builder.
With custom campaigns, you could even track offline conversions. A common way to do this is to create a unique URL for your printed ads which will redirect to destination page using tracking parameters.
The price and the value of a conversion
To calculate ROI for your marketing effort you need to know at least these basic numbers.
This is how much profit a single conversion on average will generate. For a direct purchase, this is quite straight forward. When tracking lead conversions you’ll have to work out the lead to customer ratio first to calculate a value for your conversion based on the average sales profit for the type of lead you’re getting.
The cost can be divided into two categories:
- The cost of work producing and running the actual campaign including graphics, landing pages, banners and content including the work you or your team have put in.
- The cost of media like AdWords, Facebook.
Tracking the former is usually pretty simple. As mentioned before, AdWords campaigns can be tracked directly under Google Analytics Aquisition › AdWords view. You can see cost and conversions of all your campaigns in one view or click your way down to individual ads and keywords see more detailed reports.
For other platforms like Facebook and Twitter you have to youse their own analytics tools to see the cost data for your ads. To see conversion data each platform provides their own tracking codes to add to your website. The process of setting these up is pretty similar to how goals are created in Analytics.
If you absolutely need to see everything in one place you can import cost data into Google Analytics or use a third party service to automate the process.
Conversions across multiple channels
When running campaigns across multiple channels a scenario where a single user has multiple touchpoints with your campaign is more than likely.
You must take this into consideration when measuring your conversions.
Typically the credit is given to the last source leading to conversion, but it may not be the only one. In Analytics you can view the most common patterns leading to conversions under Conversions › Multi-Channel Funnels view.
Let’s imagine the following situation:
User comes trough an organic search result, makes a purchase and the conversion is given to Organic Search.
But after analysing the data more closely, you’ll find out that the same user has visited your site first through a Facebook ad, then joined your mailing list, visited again clicking a link in your email newsletter coming back several weeks later through that organic click that was given the credit for the conversion.
A lot has happened before and after the first visit. Hours of research between different products, prices and resellers before making a decision to purchase.
There’s no doubt the Facebook ad and email played a big part leading into this particular purchase. Without tracking multi-channel conversions you could be missing details like this, ignoring some the impact of certain marketing activities.
Digital marketing is not easy, but it gets a lot easier when you can track your individual activities, knowing what works best for your business.
Data gives you valuable insight on how different marketing channels work together for your ideal customers and what kind of content is best suited for each.
Tracking does not happen by itself, so make sure you set the goals now and make your next marketing move based real data.