You may have heard the story of a marketing professional at a large consumer goods company headquartered in Cincinnati who famously carried a little card around with the ROI of each media channel printed on it. Whenever a media salesperson pitched a new media channel, this dog-eared reference would be consulted. The marketing pro would compare the ROI of the proposed media to those listed on the card and frequently reject it based on these fixed (and inaccurate) ROI scores.
Unfortunately, this anecdote represents a common theme in marketing. Looking at ROI in this myopic way limits the overall potential of your marketing mix to drive higher returns and increased performance for your business.
So how should one look at marketing ROI, and more importantly, are there ways to increase it?
Assess the return
First, let’s lay to rest the idea that a channel or marketing effort has a static ROI or an ROI independent of the entire marketing mix. When trying to assess the return on one’s marketing investment, it’s essential that the effort is measured holistically. Managing marketing channels separately and using siloed measurements fails to show any interaction effects. Marketers’ jobs might be somewhat dependent on their ability to measure what’s working, what’s not, and just as importantly, what may be helping or hindering the overall marketing effort.
Leading marketers are quickly adopting Unified Measurement/Total Marketing Measurement models — a new category coined by Forrester and Gartner respectively. The concept is the evolution of measurement methods to provide one integrated, holistic view of marketing effectiveness. Most significantly, however, a unified measurement approach gives marketers new capabilities to leverage interaction effects between channels, creating a 1 + 1 = 3 effect.
These integrated solutions deliver insights to marketers to better model the impact marketing and advertising are having at the person level. The approach has the dual benefit of strategic insight and tactical decision-making: integrated solutions help guide investment in different media coupled with methods to best match creative, copy and messaging across every channel — both online and offline.
With a unified measurement approach, you may create — or hack — a higher ROI for your marketing investment.
Hacks that can influence one’s overall return are:
- The message.
- The targeting.
- The reach and frequency dynamic.
- The cost of advertising.
- The media.
1. Hack the message
It may seem obvious, but the message and the creative you use to deliver it have a considerable influence on the impact of your marketing. We know that getting the right message to the right people can drive a significant increase in a channel’s effectiveness.
Even more importantly, a better understanding of the interaction effects of marketing can inform the best combination of messages across a customer’s journey. For example, a consumer may see a commercial on television, search on their computer, watch a product review on a social media app, and finally, get directions to a store on their phone. Advertisers with a unified view of their marketing can optimize to deliver the right message at the right time for this specific customer’s path to purchase, driving higher overall ROI than might be possible in any single channel.
An efficient way to hack the message and drive higher ROI is to develop and run multiple messages early in a campaign. Measure the impact of each quickly and optimize while the campaign is live, eliminating poor performers and shifting focus to those messages that are driving higher response.
2. Hack the targeting
A second, powerful way to realize higher returns for marketing is to hack the targeting. Specific messages work better with certain people. Even if you have the same message, switching your target audience (the people who hear the message) and the channel by which you reach them can drive a higher ROI of marketing.
In other words, the ROI for one audience might be $3.00 and for another, $0.80.
If you can measure the impact of your message from multiple media to different audiences, you can find those who respond positively and capitalize on this opportunity. In our experience, turning the dial on your targeting, tuning out audiences who don’t react and dialing up those that do, can typically increase marketing ROI by more than 20 percent. Marketers can strike while the iron is hot, optimizing live campaigns while they are in the market.
3. Hack the reach and frequency
Another powerful way to improve marketing results is to hack the reach and frequency of your media. A message delivers the most significant impact on an audience the first time they hear it. With each subsequent time the audience is exposed to the advertising, the impact diminishes. Overall ROI is a composite measurement of the message, the audience targeting and the frequency of exposure. Just as with message and targeting, an analysis of frequency can help marketers find opportunities to increase ROI.
4. Hack the price
At its core, ROI is the measurement of impact divided by the cost of media. If you can negotiate a lower price for advertising, you can increase your ROI, everything else being equal. With a unified measurement approach, marketers can identify the baseline investment commitment in every channel and work with publishers to negotiate a reduced cost. The best example of this is leveraging the television upfronts. By making buys early in the broadcast year, advertisers can get lower prices on their TV buys, hacking the ROI of this channel and all the other channels in the marketing plan that are impacted by television.
5. Hack the media
Despite suggestions to the contrary (by salespeople), the medium itself is not the most influential factor in a marketing effort’s ROI.
Research from Daniel Yankelovich published in The New York Times suggests that consumers are exposed to more than 5,000, and perhaps as many as 10,000 paid commercial messages per day. In a world with thousands of options, in most cases, advertisers can hack the media by finding alternative lower-cost and higher-impact channels to get their message in front of their audience.
The marketing pro at the beginning of this article was laser-focused on the wrong part of the equation. This strategy may unveil new options that could drive even higher marketing ROI. Gone forever are the days of three broadcast networks, a few radio stations, and a local newspaper. Today, more than ever, we have the opportunity and the tools to hack marketing efforts and access a competitive advantage in a crowded marketplace.
Today’s marketing professionals are better served asking: Can we deliver a 20 percent increase to ROI over our last campaign, and how can we leverage our tools to test and learn new ways to make our marketing efforts (and business) more successful? These are the questions worth exploring.
Original article source: https://marketingland.com/feed