Fantasy or Reality – Measuring your Marketing Spend
This weekend was my fantasy football draft. I’ll admit, I’m not great at Fantasy football, yet. I know once I take the time to focus on the stats, make changes according to the numbers, and trade players that aren’t working for the team I’ll have a lot more fun and maybe even finish in the top half of the league.
That’s how I think of business. Once you take the time to know the numbers and make the changes necessary to improve your numbers, your focus shifts from drama (i.e.; worrying about what the numbers are) to data (i.e.; knowing what the numbers are and having the information you need to make changes.)
Some numbers, like sales and revenue, are easy to measure while other numbers, like marketing spend, aren’t as intuitive. But it doesn't matter if you are doing traditional or digital marketing, it’s important to know your numbers.
The first step to tracking marketing spend is to set a budget for marketing and decide how the budget will be allocated. Settling on a firm budget structure will help tracking. A small company may have one marketing budget where a larger company might have a budget for each location, product, or audience.
Once you have a marketing budget structured, decide who is responsible for tracking the marketing spend. At a small company, this might be the owner while at a larger organization, each location might track their spend separately and roll it up to a larger entity.
Now comes the fun part, deciding how to measure the spend.
Traditional marketing, conventional marketing used before internet marketing became rampant, might be easier to measure because it’s been around longer and there are tried and true ways to track how much is spent on each channel vs sales.
Digital marketing becomes more complex because there are so many different touch points. To get a complete picture of your marketing spend, you’ll need to track all interactions. Google Analytics is a good place to start because you can track email, social media, PPC (pay-per-click), and SEO (Search Engine Optimization).
If Google Analytics seems too overwhelming, pull out a spreadsheet and start tracking interactions by hand. Examples of metrics to look at each week are:
Website - Total number of unique visitors to your web site
E-mail - Total number of emails sent, Total number of opens, total number of clicks
Social Media - Number of followers, shares, tags, or likes
If you’re paying for advertising (i.e.; facebook, instagram, linkedin, or adword) metrics include number of impressions, cost per click, and cost per conversion.
One of the tricky parts of tracking your marketing budget is that not all marketing will lead to a sale. Having a goal in mind for your marketing is the only way to know if your marketing is successful.
For example, if you are running ads to get people to sign up for an email list, you would measure the number of email subscribers and expect the number to go up each month. If the goal is new customers, you will want to measure the number of new customers during a time frame.
The effectiveness of your marketing campaign won’t be known overnight; it takes time. Whether you’re doing it on your own or hiring a company, have a goal for your marketing spend, assign a budget, and measure the effectiveness of your campaigns.For help in setting up your marketing budget or tracking your marketing spend, schedule a call with me to talk about how I can help. Knowing if you're getting the results you want will take you from managing based on intuition to managing based on data.