If you work in marketing, you’re no doubt inundated with emails, retargeting ads and Google alerts about the 10 new advertising technologies that are going to “transform the face of marketing”. These new platforms claim they can peer into consumers’ minds, predict their behaviors and use a specialized form of mind control to guarantee a customer will connect with your brand. And while it’s tempting to believe these claims, the reality is often more disappointing.
At Echo Factory, we’re proud to say we’re ad-techoholics. We’re able to weed through the noise and select the technology that might actually change the face of marketing—or at least give it a face lift. But if you don’t have a team of experts who can separate the brilliant from the bullsh*t, how can you make smart decisions when it comes to investing in new ad tech? In a recent article from CSQ, Echo-Factory’s fearless leader, Mike Schaffer, shares the answer: understand ROI.
The history of (not) tracking ad dollars
Accurately tracking the ROI of advertisements is a relatively new practice. Back in the Don Draper days, the success of an ad campaign was evaluate on how many newspapers were purchased on the day your ad ran, the number of TVs that were tuned in when your commercial played or whether or not your client heard their ad on the radio during their commute.
Fast forward to the age of social media, mobile apps and big data. Digital advertising has transformed the way we track ad effectiveness. With new ad tech tools, companies have a more definitive way to track the source of every sale or lead. In a few clicks, you’ll know the last action a consumer took before they converted, and any digital advertising they encountered along the path to the sale.
Of course, this isn’t always the case. Whether it’s due to a flaky tool or a company’s unwillingness to pay attention to the numbers, there are still many cases of marketers blindly throwing money at advertising. In the past year, our agency took on multiple accounts where we discovered that the companies were spending upwards of $1k to acquire a new client who would spend less than $50 on their first purchase. You don’t need to be a statistician to know that it will take way too many purchases for the company to break even on their advertising spend.
Using ROI to find the gold
Because we now have the technology to accurately track ad spend and understand marketing attribution, it’s essential for marketers to use that data to determine customer acquisition costs on any given channel. You can then test any new ad tech that comes along to decide where to spend your advertising dollars. Just pit the “revolutionary” new technology against what you’re already doing. If the new ad technology allows you to spend less and sell more, (we probably don’t need to say this, but we will anyway) it’s worth investing in. If not, you can peace out and skip the wasted time, frustration and money.
So while you may not have a team of highly-trained professionals who can take a deep dive into every new technology that comes your way, take a look at the projected ROI of that new technology and use that to better inform your decisions. To learn more, check out the full CSQ article on ROI tracking. And let us know if you need help developing a marketing strategy that maximizes your ROI. (Trust us–we’re one of the brilliant ones.)