A monthly report of their company’s marketing activity can feel like another language for many founders. They see thousands of impressions and hundreds of clicks, but not seeing that activity reflected in their bank account. With digital advertising costs continuing to increase, it becomes incredibly easy to fall victim to the vanity metrics trap numbers that look good on paper, but don’t provide a true digital marketing ROI.

Many businesses feel like their budgets are disappearing into a black hole. HubSpot’s State of Marketing research indicates that identifying effective tools and what strategies are best for reaching audiences is one of the top challenges faced by modern businesses today. If you want to fix the hole in your budget, stop using the spray and pray method, and switch to performance-driven marketing.

The Issue with Spending Blindly

Most businesses are not able to measure their success with digital marketing prior to launching their marketing campaign and thereby waste large sums of money on digital ads. Many businesses feel the need to be on every platform from LinkedIn to Instagram and spend significantly more on digital ads as a result of that need. However, without a strategy in place prior to launching a digital ad campaign, the results will be fragmented and have higher Customer Acquisition Cost than would have been possible had a strategy been put in place prior to launching the campaign.

The first step to optimizing your marketing spend is identifying which efforts effectively drive revenue within your vertical. Dominating one high-performance channel will always outperform a multitude of mediocre ones.

Embracing Performance Driven Marketing

Transitioning from “spending” to “investing” means changing your approach to marketing around results. Performance Marketing is all about accountability…for every dollar you spend, you should be able to justify why you spent it and how that will lead to some sort of outcome (lead, demo, sale).

Through an emphasis on performance marketing, you eliminate guesswork. You create a pathway for your data to track the specific point where a prospect drops out of your funnel; this allows you to continually adjust your messaging and continue investing in the highest probability opportunities.

How to Measure Digital Marketing Success

To correctly measure your Digital Marketing success, you must track the correct metrics; you will not be able to make improvements if you do not track your KPIs. In order to obtain an accurate view of your digital marketing ROI, you need to look beyond just clicks and look at:

• CAC (Customer Acquisition Cost): How much do you spend to get new paying customers?

• LTV (Customer Lifetime Value): Is a customer’s revenue greater than the cost of acquiring that customer?

• Conversion Rate by Channel: Which platform gives you the best quality traffic?

According to HubSpot’s State of Marketing study, companies that calculate ROI are 1.6 times more likely to receive larger budgets. Why is this? Because if you can show that your marketing is a profit center, not a cost center, it is easier to justify (from a financial point of view) scaling your marketing.

Optimizing Your Marketing Spend

In order to achieve true efficiency in your marketing, you must consistently audit your spend. Marketing spend optimization is not a one-time activity; it is an on-going process of “trimming the tail.” By continually identifying the bottom 20% of unproductive advertisements and reallocating that budget to the top 20%, you can improve your performance levels without growing your total marketing spend.

Bottomline: Ending the Steal!

Marketing budgets should be an engine that accelerates growth, not an open valve on your profit and lose statement (or an economic drain).  By concentrating on performance based marketing and developing tangible ways to measure success in the digital space, you are able to create a validated resource in the digital realm

Bexcod assists its customers in moving away from budget-burners (non-results oriented methods) into higher impact, data-based strategic thinking.  The scope of services we offer ranges from examining how you spend your digital marketing advertising today and planning for total optimisation, with each dollar you invest in marketing being accounted for and working toward your digital marketing return of investment (ROI).  Stop using a ends justifies the means approach to growth and start using a means will get you to end approach!

If you need an outside perspective on what is working, what is not, and how to build a marketing system that supports revenue instead of just visibility, our team at Bexcode can help you break it down clearly. Schedule a call today!