It’s helpful to think of all media channels as a marketplace for attention. This is particularly true for paid media channels. Whenever you are seeking to generate awareness, you are competing with other players, and you are participating in a marketplace for consumer attention. This is true regardless of the digital media channel at hand, or your objectives or tactics employed.
All marketing initiatives need to ultimately drive hard dollars; either in the short or long term.
A common misconception is that branding campaigns are merely “for visibility”, to “generate awareness”, to “achieve reach”, etc. While it’s true that measuring the results and tying them to hard cash should always be the focus, it’s a difficult endeavour to say the least. That said, you need to have metrics in play to gauge the effectiveness of your campaigning.
It is becoming increasingly clear today, that there is a finite amount of user attention available. There are many signs that consumers are experiencing media fatigue, and with regards to advertising in-particular, most consumers would prefer to live their digital lives without it.
As a marketer, it is your job to convert the available user attention into hard dollars, be it on a direct response basis or through lengthier branding initiatives. Such lengthier initiatives may be used to shape people’s perceptions steadily while nudging them towards purchasing your product, but they should ultimately be contributing to hard dollars.
Conversion Rates
Another make-or-break metric for any campaign is the conversion rate. This can be a measure of actual purchases, or simply a measure of new users who interact with content in the way you deem valuable to the business.
Forecasting the conversion rate is the most difficult piece of the puzzle. The reason for this is complex. Primarily, all businesses are to some extent unique — either in terms of their services, their maturity or their means available to them. Occasionally, you can strike luck and discover that thorough benchmarking of your industry has already been done, and you can get an immediate feel for the performance you could expect.
More often than not however, because of the uniqueness at hand, you’ll need to secure your own primary data to identify the lay of the land. Remember, the more effective you are in converting users toward your desired goals, the more aggressive you can be in acquiring traffic. There is a clear interplay between website effectiveness and marketing aggressiveness.
Path to Purchase
In order for businesses to be more strategic about how they connect and provide information to their market, they need to have an understanding of a customer’s full journey. They need to understand where and when it is best to reach out.
What is the path to purchase likely to look like? Even with just a little bit of analytics data, you can answer the following questions to create a picture of your own business’ path to purchase.
How many media touch points does a user require from first exposure to ultimately paying for your product?
What’s the time involved from first impression to conversion?
Do we expect the conversion paths to typically start off from one channel and end on another channel?
It’s also important to introduce the concept of attribution at this point. Attribution is the science that determines which media drives your purchases. For example: If people find you on social media, but then return to your site two weeks later through organic search, which of these channels actually generated the sale?
While attribution has been a big buzzword over the past few years, the hype is starting to recede. One reason why is because conversion paths are often very fragmented and erratic. In other words, people usually don’t follow the same neat, streamlined patterns over and over when discovering and buying a product. In response to this, many advertisers now use the common last-click methodology (i.e. they credit the last touch point in the path with the conversion). While this was long regarded as overly simplistic, it has re-emerged thanks to its very robustness and simplicity.
What does the typical or observed path to purchase look like?
What is a standard conversion rate, and what would be a good one for you?
Media Footprint
Now that you have assumptions as to how the various channels are going to perform, you can start making plans to generate exposure. Where do you need to be seen?
Start with channels, and then go as specific as you can: keywords, websites, etc. It’s also helpful to go back to your target persona here and take a look at how they spend their time online. Tools such as the Google Display planner can be very helpful here.
Acquisition Costs & Media Landscape
Next up — figuring out the cost to drive traffic from the desired media landscape you’ve identified. For Google search, this is easy. For social media, this is relatively easy. For Display, it’s fairly easy.
It’s important to remember that this data can be fairly crude and it needs to be cleaned up and put into the context of your business and its environment. Again, also remember that you’re always running a unique business. In other words, benchmarks and averages may not apply perfectly to your case.
Apart from just the cost per click, you also want to find out how much volume each channel can deliver. There’s always a price/volume dynamic at play – for instance: it’s a good trade off if you can double your traffic for a 25% increase in cost.
Setting Targets
Once you have outlined your assumptions and projections for lifetime value — and identified the media landscape — you can start setting targets. One of the most important targets for each channel is the cost per conversion, or cost per acquisition. You want to make sure you’re clear on how much you want to pay per new customer for every new sale.
Setting volume goals is not necessarily all that helpful or meaningful. You’ll get as much volume as you can with the cost per acquisition targets set. As mentioned above, there are always price/volume trade trade-offs. The higher you set your price targets, the more volume you can generate – albeit at a higher price. Finding this elasticity is a key part of the continual marketing strategy process.
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