Your FAQs About Marketing ROI, Answered
July 10, 2017
You’ve got a strong strategy for lead generation, but can you prove how your activities drive marketing ROI? Measurement remains a challenge for many B2B marketers, and applying insights to improve your existing strategy isn’t always as straightforward as one might hope.
If you’re a marketer who wants to go beyond the click to measure the true impact of your efforts, we’ve compiled a list of frequently asked questions. Use the answers below as a launchpad for better marketing ROI measurement.
Q. What are examples of how marketers can act on the results of measuring ROI?
A. Marketers can do the following once they understand the return on their investment:
● Modify and test an ad to try to drive higher performance
● Offer different content to try to better appeal to the target audience
● Reallocate ad spend to prioritize the ad(s) driving better returns
Q. Who should be involved from my company in defining a structured method of measuring the value of marketing?
A. Because marketing’s ultimate contribution is helping drive revenues, this exercise should involve representatives from marketing, sales, and finance.
Q. What is the difference between metrics and analytics?
A. Metrics are what you measure about your marketing programs to gauge performance or progress. Your most important metrics are your key performance indicators, or KPIs. Analytics use metrics and how they’re trending to help you make decisions about your marketing efforts. Metrics and analytics are both important. You can’t have analytics without metrics, but metrics alone won’t help you take action that can improve your results.
Q. What are useful metrics for measuring the effectiveness of upper-funnel programs?
A. In the upper funnel, your goal is reaching your audience at scale to build awareness and a positive impression of your brand, even with those not yet in the market for your offerings. The following are useful metrics for measuring the effectiveness of upper-funnel programs:
● Branded search
● Brand recall and lift
● Website and referral traffic lift
● Targeted page views, pages per visit, and time spent on site lift
● Subscriber/opt-in lift
● Targeted engagement (open rate, shares, likes, comments)
● Bounce rate decline
● Targeted unique visitors lift
● Inbound links lift
Q. What are useful metrics for measuring the effectiveness of lower-funnel programs and tactics?
A. In the lower funnel, you “nurture” prospects that have either implicitly or explicitly expressed an interest in your brand, product, or service. The following are useful metrics for measuring the effectiveness of lower-funnel programs and tactics:
● Website form conversion rate
● Leads (organic vs. paid); cost per lead
● Marketing qualified leads (MQL); Cost per MQL
● Sales qualified opportunities (SQOs)
● Sales accepted opportunities (SAOs)
● Qualified lead velocity rate (i.e., growth in qualified leads)
● Pipeline contribution
● Revenue contribution
● Retention rate and/or customer lifetime value and/or upsell/cross-sell
Q. If I am targeting small companies, can LinkedIn find these through people’s profiles?
A. LinkedIn gives you the ability to target based on company size, so yes, you can set up your target to focus on small companies. Then when you’re getting leads from LinkedIn, you know that they are from small companies.
Q. Does it makes sense to attribute revenues to an ad, even if it was the first touch?
A. Last-touch conversion says that whatever marketing channel last touched this lead gets full credit for the conversion. That’s the place most advertisers and marketers start because it’s the simplest. If you’re getting a little bit more sophisticated, over time you probably want to move to something more like a time decay attribution model or a multi-touch attribution model. This helps you understand the impact of your different marketing tactics.
Q. How do you suggest organizations with a long sales cycle using last-touch attribution models identify ROI ad spend for top-of-funnel effort?
A. With a long sales cycle, top-of-funnel marketing efforts aren’t necessarily going to get attribution credit. That’s because, by the time someone’s converting into a lead, they may have consumed more than one piece of content and they may be lower down the funnel when they’re consuming it. At LinkedIn, we find that most of the leads that become MQLs have consumed multiple types of content (paid and organic) before they reach the lower funnel. This suggests that it’s necessary to add that top-of-funnel investment to fuel the lower funnel.
It is good to look at what percent of qualified leads have consumed upper-funnel content to understand which of it is helping drive people lower down the funnel.
Q. What is the definition of a quality lead?
A. The definition is different for every company because every company has a different ideal customer. A qualified lead is a lead meeting certain criteria that sales and marketing have agreed is indicative of a strong prospect for the sales team. This is usually qualified through analytics and/or a lead scoring system. The key to coming up with criteria is to conduct research to understand your buyers and how well your product or service solves their problems.
It will take time for each company to understand which metrics are most relevant to their activity and goals. Building a better marketing strategy won’t happen overnight, but by testing different ads, targeting strategies, and resource allocations, you can take meaningful steps toward proving your marketing ROI and making those numbers grow.
Ready to learn more about measuring your performance. Download our new eBook, Solving for Marketing ROI: Measuring Peak Performance.