Measure the ROI of Digital Advertising Beyond Revenue Impact

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Posted: February 19, 2016 | Digital Marketing

Return on investment (ROI) is an important part of digital marketing (and  really, almost every part of marketing)—it tells you whether you’re getting your money’s worth from your marketing campaigns. And if you’re not, it’s critical to get to the bottom of it, and understand why so you can learn how to improve your campaigns. But first, you need to understand how you can effectively measure the ROI of digital advertising. 

The most instinctive way to measure digital advertising ROI is to track metrics that tie directly to revenue and profit (think conversions, opportunities, etc.). While it sounds great on paper, in the real world, this oversimplified view can paint an inaccurate picture of your ROI, especially if your product is sold at a low price per unit. Big picture measurement often factors in soft metrics—things like brand impressions, impressions, website visitors, and downloads—which help tell a more complete story.

Here’s how to measure ROI using soft metrics for three popular digital advertisements—mobile video ads, native advertising, and programmatic advertising:

1. Mobile Video Ads

Mobile video advertising can be more effective than regular web video advertising or even television advertising. This is because mobile is a much more intimate medium—it’s less of a shared experience and has fewer distractions.

When done well, mobile video ads provide helpful information that drives traffic to your website, increases brand awareness, and is valuable enough for social sharing. Home improvement retailer Lowe’s recently demonstrated the value of mobile video ads with their #lowesfixinsix campaign on the popular video app Vine. The quick tips are fun and informative—and over 35,000 of their followers choose to have their ads in their feeds.

Measuring the ROI of Mobile Video Advertising

When evaluating the success of your mobile video advertising, take these metrics into account:

  • Brand awareness: Measure brand awareness by looking at your direct traffic numbers (hits that come from viewers typing the URL directly into their search bar), the number of people who searched for your video by its name or hashtag, the number of clicks that came from referrals, and the number of social media shares and mentions. You can also find current search data on your brand name by using a tool like Google Trends.
  • Purchase influence: Did your ad lead to an increase in sales? Look at the first-touch and multi-touch attribution that was generated by your video or video program for a look at the ROI but for a larger picture, look at the amount of traffic generated by your campaign and compare it to your sales numbers—including the numbers before and after the campaign launched.
  • Accessibility: Track the placement of your ads and test them to make sure they are viewable on all devices and that they are not hidden on the page. This ensures people actually have access to your ads.
  • Mind share: While you have no way of measuring how often people discuss your brand with friends over coffee, you can get a good idea how often people are talking about it by looking at the comments and shares on your mobile videos. A successful mobile video ad will have both.

2. Native Advertising

Effective native advertising fits seamlessly into the organic content of the sites that carry them. Also known as an “advertorial,” this type of advertisement provides useful information to readers in a format that resembles non-paid articles on the website. Native advertising can be found in hard copies and online newspapers and magazines, but it’s also seen on social media sites such as Facebook.

IBM pays to publish their own content on the Forbes platform as IBMVoiceTheir paid content looks and feels like an article on the site, but it’s clear that it’s marketing content. In fact, native ads that look too much like unbranded content can actually hurt your campaign and reputation if you leave readers feeling duped.

IBMVoice

Measuring the ROI of Native Advertising

Measuring the ROI of native advertising can be challenge for many marketers. It’s measured primarily by click-throughs, which is an important factor to consider, but other measurements are also critical in understanding the full picture of its performance:

  • Customer acquisition: How many click-throughs via native advertising led to acquiring information that you can nurture toward conversion? To measure this, divide the total number of click-throughs by the number of people who submitted contact information (for example, by signing up for your newsletter). This number should be higher in connection with a native advertising campaign.
  • Reputation: Does the information presented in your native ad help develop the company as a trusted expert or thought leader? Does it increase the number of people turning to the brand’s website for advice? Look at the number of comments and queries you receive in connection to your ad, as well as increased traffic.
  • Brand recognition: Do more people recognize your brand as a result of the native advertising? To determine this, look at your website analytics to find the number of hits that come in from your native advertising directly, and then use Google Trends to see if the number of people searching for your brand name is increasing.
  • Mind share: Are people sharing your content on social media? Are they talking about it? You can usually find the number of social media shares right on the content page.

3. Programmatic Advertising

Programmatic advertising is software-created, specifically-targeted advertising. You probably see this type of advertising many times a day online—they’re often displayed as banner or sidebar ads that change whenever you refresh your page.  

A huge amount of marketing dollars go into programmatic advertising. In fact, eMarketer reports that it expects to see programmatic ad spend reach $20.41 billion this year. This type of advertising is automated—created directly, without an ad salesperson or contracts, and is based on your goals. The biggest advantage of programmatic advertising is that it can be altered to best meet your company’s needs, based on the demographics, location, and behavior of your target audience.

Diesel, a popular fashion brand, included programmatic ads as part of their multi-channel campaign last fall. Their Shazam ads, for example, included copy specifically designed for the targeted setting. When Shazam couldn’t recognize a song, the Diesel ad empathized with the user.

Diesel

Measuring the ROI of Programmatic Advertising

Because of its versatility and flexibility, programmatic advertising metrics must be measured frequently to be effective. While things like click-throughs and mind share are important your measurements should focus on areas such as:

  • Recognition and reputation: Search for your brand name on social media and keep track of the number of mentions, as well as whether the mentions are positive or negative. Your recognition should increase the longer your programmatic ads run.
  • Website traffic numbers: As your brand becomes more recognized, you should see an increase in traffic, from people who come directly to your site by typing in your URL as well as following your ad.

Hard metrics are without a doubt important for proving and improving ROI (and demonstrating the value of your activities and spend to the C-level), but it’s critical to track vanity metrics in addition to ROI in order to have a comprehensive view of how your ads are doing. As your brand pushes marketing boundaries into new strategies—like mobile video ads, native advertising, and programmatic ads—make sure you are measuring ROI beyond just revenue impact so your whole team can continue to drive engagement and improve sales.

 

Mike Tomita is the Director of Demand Generation for Online Marketing at Marketo. He is experienced in SEO, SEM, conversion optimization, and social media marketing.

Read Mike's Blogs

Vanity metrics aren't just for show. Here's how you can use them to determine the ROI of your digital ads

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