Today’s marketers are responsible for utilizing a value-driven approach towards their organizations short and long-term online marketing initiatives. Three of the primary approaches towards deriving that value include: Site Optimization, Business Process Improvements and Campaign Analysis and Optimization. This month, I’d like to discuss the following aspects of campaign analysis and optimization and how it can drastically affect a marketer’s decisions on where to allocate marketing budget both in the short and long term:
Introduction to Campaign Analysis and Optimization
Years ago campaign analysis and optimization was often overlooked and marketers relied on their intuition to make decisions regarding marketing spend. However, those days have long passed and now marketers must justify marketing spend to stakeholders with the supporting data and facts. Fortunately, today’s marketers can leverage many established best practices and tools to efficiently collect the necessary data to analyze marketing campaigns and make informed data-driven business decisions. Campaign analysis can not only help the marketers to make short term fixes to their marketing campaign mix but can also provide the marketer with insight into maximizing the lifetime value of a customer over time.
The campaign analysis and optimization process can be divided into two major categories:
Building a Foundation
The three major areas involved in building a successful foundation for the campaign analysis and optimization process include:
The following is a very brief overview of how the query string parameter identification method works. In order to most efficiently attribute specific results to a specific campaign, each campaign should be identified by a parameter. This allows tracking of certain variables such as visits, page views, conversion, etc, at a campaign level. The query string includes the variables to be tracked; it is appended to the end of the url, separated by a question mark. For example: www.mysite.com?Var1=Value&Var2=Value
Harvesting Low-Hanging Fruit
After the foundations are in place, the marketer should be enabled to effectively determine what the conversion rate for each campaign is. Then this data can be taken one step further to determine the average order value from each campaign and then even further to calculate the value of each visitor.
These metrics should help identify low hanging fruit for quick and effective results allowing the marketer to discover the most valuable campaign mix. Campaigns that provide the highest value can easily be identified, making it easier to confirm that marketing spend is being utilized effectively. Alternatively, underperforming campaigns can also be identified to decrease wasteful spending. One of our e-commerce clients was able to employ this tactic to identify a 79.2% difference in site conversion between their best performing and worst performing campaigns. By taking a proactive approach to this data, this online retailer was able to discontinue the poorly performing campaigns and focus on the higher performing campaigns, resulting in a 23.7% reduction in marketing spend and 3.5% increase in overall sales.
Once the foundation is in place and low-hanging fruit has been addressed, it is important to have a long-term process for continual optimization in place, as shown in the image below. It is essential to proactively analyze results against benchmarks and goals in order to measure long term progress. Since visitors are not static, it is important to continually optimize online campaign mixes, knowing that what worked today may not be most effective 2 months from now. In the long-term, these reports will serve as part of your foundation for continual improvement and the employment of more sophisticated analysis. For instance, over time this data can serve as the basis for improving the overall lifetime value of customers by conducting recency and frequency analysis to identify the optimal time range/number of times to target previous visitors.
In conclusion, whether addressing the low-hanging fruit to make quick improvements to a campaign mix or the long-term optimization of overall customer value, the process of campaign analysis and optimization is a critical part of an effective marketing program. By truly leveraging campaign analysis and optimization, the marketer can make both short and long-term, data-driven decisions with confidence and justify marketing campaign expenditures to stakeholders.
Bill Bruno is the CEO - North America, Ebiquity.