All too often people read a headline like the one above and say, “I’m just a small business in Toowoomba – that does not apply to me.”
There is no denying the fact that most businesses in the Toowoomba region are indeed 1 to 2 person operations. Yet, the region is cluttered with an abundance of radio stations, television stations, several newspapers and letterboxes full of promotional activity. So it is safe to assume that advertising budgets are commonplace. Therefore, no matter how small your operation, there is a critical need to get the best return on your marketing investment. It could be argued that as a small business you have to measure marketing/media spending even more effectively as the dollars are so hard to find to pay for mainstream media.
Mainstream media is struggling to retain audiences as digital tools like the Internet make their way into the budgets and empower small business like no other time in history. This is why websites, and allied digital marketing tools, are the most cost effective tool for small business promotion ever devised.
According to a report published in 2011 by Forrester Research, within the next 5 years, traditional forms of marketing and advertising (billboards, television, print, etc) will be eclipsed by the online marketing market. By 2016, advertisers will spend $77 billion online, comprising 35% of all ad spending. Online advertising expenditure in 2010 alone was $26.1 billion, featuring 3% growth from the previous year. Although traditional forms of advertising like print media will continue to be used, the very fact that 75% of the world’s population will be online by 2012 makes online advertising a promotion avenue one can’t afford to ignore. According to IAB Online Advertising Expenditure Report 2011, the Australian online advertising market has continued to record double-digit growth, reaching $2.66 billion for 2011.
With the budgets for marketing increasing exponentially, it is becoming increasingly important for any business large or small to track ROI when it comes to marketing expenditures. Put simply – “if you can measure it – you manage it”.
A campaign/promotion/activity that generates more revenue than it costs is termed as “ROI positive” and is sustainable. This is always the goal and the expectation, however it is rarely the outcome. Most small businesses that have advertised on the radio could not tell you the ROI of a particular campaign. A business can only determine if it has achieved a ROI positive campaign if it has set Key Performance Indicators (KPIs) to measure the success (or otherwise) of the activity, and put measures in place to track those KPIs. The main KPI one needs to track is known as CONVERSIONS. For example, it might be the number of products purchased, the number of people that signed up for a newsletter, the number of people to book a consultation or the number of leads generated to further market to. Working on analysing these measurements, or KPIs, not only helps track the ROI on marketing expenditure but allows for tactical enhancements to improve a message within the campaign. Swift intervention in these matters can save a lot of money.
Tools like 1300 Web Pro’s database marketing system and Google Analytics can provide unprecedented insight into campaign ROI – and not just from your Internet marketing. As an example, a radio advertisement can promote an offer which directs a prospect to a particular website where we can capture their details and continue to market to them. We can definitively calculate the number of sales made from a particular radio campaign or tradeshow, and thus ensure those activities are ROI positive.
Do you have any tips on measuring the return on investment from your campaigns? Share them in the comments below...
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