If you’re like most businesses, you don’t have a bottomless marketing budget. Every dollar you spend has to create positive return on your investment (ROI), or at the very least teach something valuable so you can spend future dollars better.
Would you buy ads if they cost more than you earned off each? Would you pay an influencer for a shoutout if they couldn’t send any traffic to your site? Would you spend hours crafting content if your customers didn’t want to read it? Of course not!
If you want to verify the ROI of your campaigns and improve their effectiveness, you have to measure. Performance improvement expert H. James Harrington once said:
“Measurement is the first step that leads to control and, eventually, to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”
You need to track your marketing campaigns for two primary reasons:
- You need to know what isn’t working. Not every campaign will be successful. If a particular tactic isn’t meeting your goals, there’s no need to continue spending resources on it. By trimming out what doesn’t work, you’ll be able to focus your time, energy and money on more things that do work.
- You need to identify what is working and how well. A positive ROI from a marketing campaign isn’t always sufficient. You want the maximum ROI that can be achieved. This means you have to compare positive ROI campaigns against one another. For instance, if Campaign A collects 50 leads/day, but Campaign B collects 75 leads/day, you’ll want to invest resources into B, even though A was successful.
“For many small business owners, analytics — measurement and tracking of metrics — is considered the “ugly duckling” of marketing,” says internet marketing strategist Phil Frost. Phil’s right. Marketers and leaders consistently neglect to measure their campaigns.
As your business grows and you invest more resources into marketing, you’ll be running campaigns constantly. At some point, you may have multiple campaigns running at the same time. It will become impossible to identify the sources of your traffic, leads, and sales unless you take steps to measure campaign performance.
Ongoing analytics vs campaign analytics
It’s smart to consistently measure your brand’s performance with a general analytics tool. This is called ongoing analytics and it’s usually monitored with a tool like Google Analytics.
Image: Wesley Fryer / Flickr
“Ongoing analytics are necessary for keeping up with the overall pulse of general conversation about your brand and company,” says Jenn Deering Davis, co-founder of Union Metrics. “Once your brand tracking is set up, you can just let it run and check in regularly to see how everything is going.”
Campaign analytics, however, help you understand the effectiveness of your targeted efforts. How you measure a campaign will depend on the campaign’s goals, duration, and the tactics you used.
For instance, a one-time coupon is a single campaign. You would want to know how many people used it. More importantly, you would want to learn where your campaign was most effective. Did it work better on social media, through email, a partnership, or some other channel? Did customers respond better to the coupon when it was attached to a particular product?
Assign KPIs that support your goals
Back when you were planning your marketing campaign, you should have created SMART goals. The “M” in SMART refers to measurable.
Here is an example of a measurable goal: “Sell 2,000 units of our new spring collection by June 1, 2017.” If 2,000 units are sold before the end date, the goal was met. Pretty simple, right?
Well, you have to go a bit deeper. You have to measure the tactics and sources used to achieve that goal. A tactic is how you’ll promote a campaign. A source is where you’ll promote. For instance, you might decide to post (tactic) to your Facebook page (source), but only reply to commenters (tactic) on Twitter (source).
Let’s say this is how you decided to promote your campaign.
- Aggressive social media penetration. You posted often, using hashtags, and commenting directly to other users and on other pages/profiles.
- Consistent content marketing. You pushed out one blog post every day that helped your users solve common problems.
- A partnership with a strong online influencer. You paid an Instagram model to make posts while wearing your clothes every day for two weeks.
- Paid advertising. You bought Facebook and Google Shopping ads and targeted them to your audience.
Before you start acting, you should define an appropriate Key Performance Indicator (KPI) for each tactic and source. Since your goal in this example is fairly simple (sell retail products), you would measure each tactic’s effectiveness based on the number of sales that came from each channel.
After your campaign (or perhaps at some point during), you would compare the sales you achieved from each channel. You might learn that your influencer partnership and paid advertising were more effective because they reached your audience when they were in a buying mood, but that blogging and social media posting weren’t worth your time. These conclusions would help you tweak your campaign or improve future campaigns to maximize your ROI.
Sales aren’t the only ways to measure a campaign. How you measure will depend on your goals. You could also track…
- SEO keyword position
- Website traffic
- Ad clicks
- Demographic information
- Backlinks earned
- Phone calls
- Blog comments
- Social media mentions
- Website bounce rate
- Website session time
- Leads (subscribers, webinar attendees, etc.)
- Any other metric that has meaning for you
Drill deep into your data
There’s no limit to how granular you can be with your measuring. The most effective marketers take advantage of every bit of data for maximum learning.
Let’s go back to our example. Your Instagram influencer-model posted a series of photos wearing a variety of items. Which of those items sold best? Are the model’s fans more likely to buy accessories? Do they prefer to buy shoes, dresses, or scarves?
If the model’s fans prefer to buy women’s shoes more than any other product, any future partnerships with that model should only involve shoes so you get the best ROI from that campaign. If you wanted to push accessories, you should find a model whose fan base likes accessories.
What’s more, you can drill down to types of products or even specific products. If that model’s fan base likes classy high-heeled evening shoes more than any other style, you would want to know.
For that type of granular tracking, you need to add UTM parameters to your links. UTM parameters are bits of code that are tacked on to the end of URLs. They store information about the URL for analytical tools to read. To track the influencer-model’s effectiveness on your campaign, you would instruct her to link to your products with one of your special UTM links.
To include UTMs on your links, simply add parameters to the end of the target URL. Here are your options:
- Campaign source (required): Identifies the source of traffic (search engine, newsletter, influencer, etc.). Usage = utm_source.
- Campaign medium (required): Identifies the medium (email, ad, etc.). Usage = utm_medium.
- Campaign term (optional): Identifies keywords used for paid search. Usage = utm_term.
- Campaign content (optional): Includes additional data, such as for A/B testing. Usage = utm_content.
- Campaign name (required): Names your campaign to keep information separate from other campaigns (e.g. spring sale 2017, PR push 2018, etc.). Usage = utm_campaign.
Here’s a sample URL with UTM parameters so you can see the full syntax.
By adding UTM code to the end of your URLs, you can classify any link so it can be sorted within your analytical tool. Most analytical tools (especially the popular ones) read UTM parameters. For a more detailed explanation of how to set up your own UTM URLs, check out this Kissmetrics post.
But setting up UTM URLs is tedious. If you make a mistake by giving out a URL with the wrong UTM code, you could disrupt your data and draw improper conclusions. Google Analytics has a UTM URL builder feature, but you have to create them one-by-one and the only way to share them with your team or partners is through spreadsheets.
Shameless plug: Terminus is a UTM URL tool that makes creating and sharing links easy and fast. It lets you build multiple URLs at the same time based on your own standards. You can view reports in a simple, easy-to-understand format without unnecessary data in your way. Try it free today.