Typically, a company wants a way to measure their Return on Investment from any kind of marketing campaign, from the placement of an ad on a digital signage platform to the sales impact of a webinar.
There are several ways to track ROI, and each is more complex (and expensive) than the one before. They do share several common factors though, and one of those is you have to know where the lead came from. There are several ways to track this as well. They both work together. Here are some tips and tricks for measuring your own marketing ROI.
Factors that Affect ROI
When to Measure
First, you need to know when to measure the impact of a particular marketing campaign. The proper placement of an ad might have an immediate effect on sales, or it may result in an uptake in sales six months down the road.
For each campaign, you must decide when it is reasonable to expect results.
Typical marketing says that a customer needs at least seven touches or influences to be converted from a cold prospect to a customer. Regardless of whether that number is entirely accurate, a customer needs to be exposed to your brand and brand name multiple times before they will buy. Each marketing campaign has a place in those touches, whether it is the first touch the customer experiences or the last.
Different ads affect different people in different ways. So the more variables you have in your marketing, the larger audience you will potentially reach. The question is, which audience is influenced by which ad? This is another area that can be difficult to track.
You can’t control the weather or construction and road closures. You can’t always control internet or cell service interruptions. There are many variables like this that you, as a marketer cannot control, yet that can have an impact on any marketing campaign.
Methods for Measuring ROI
There are several methods different companies use to measure ROI from any given campaign. The more precise the measurement, the more complex and expensive tracking is. The law of diminishing returns tells us that up to a certain point more information and complexity is good. However, there comes a time when the tracking cost outweighs the benefits of the information gathered.
Each company must determine where this line is for them and their marketing department. Many companies use no ROI tracking system at all, but below are common methods in order of complexity.
Single Attribution (First or Last Touch)
This is the least expensive and simplest way to track ROI. The value for a customer is assigned to either the first touch or lead generation they were exposed to or the last touch (like a product demo) they were exposed to.
For example, if a customer saw a sign that advertised a restaurant and became a customer two months later after receiving a coupon in the mail, that customer value would be attributed either to the sign (first touch) or the coupon (last touch) even if there were several other interactions in between. They may have seen the sign several times or received coupons or offers via email or regular mail several times before they actually came in for dinner.
This method makes it difficult to assign a value to the marketing in between first and last touches even though those touches have equal or in some cases greater importance.
Single Attribution with Revenue Projections
The problem with using the single attribution method of determining ROI is that time is not taken into account. As a result, businesses often make decisions in favor of short-term ROI rather than long-term gain.
The answer is to couple this with revenue projections. Suppose a coupon campaign run previously resulted in 10% revenue gains over a six month period. The current coupon campaign that has only been running for a week will be evaluated on merits of the previous one instead of an immediate top of the funnel gain.
The disadvantage is that this model still does not account for those other multiple touches and what their impact may have been.
Multiple Touch Attribution
This is a more complex model that tries to assign a value to each touch a prospect might experience before they become a customer. This requires comparing several customer journeys to see what impact each touch had on them.
For instance, customer 1 saw your ad on a digital sign, signed up for a newsletter, and received a coupon offer on which they then acted. Customer 2 saw the same sign and immediately came to your restaurant for dinner with no other touches. Customer 3 saw the sign and acted on a coupon they received via direct mail.
If all customers follow a similar pattern, then you could conceivably assign 50% value to the sign, and 25% each to the newsletter and coupon campaigns. This is, of course, quite simplified. It does mean you must research each customer journey, whether through online surveys or some other method, to determine how the individual went from prospect to customer.
This is a little more time intensive and can also be expensive. While online surveys are easy to create, they need to be evaluated once the data is gathered. Still, this method only judges the response of those you can get to answer the survey, as not everyone will.
Test and Control Groups
This is the tactic where you take two groups that have the same marketing influences and touches and compare results based on a single factor, such as advertising spend. For instance, you could run two ads on a digital signage platform using an equal monetary spend and at nearly equal times over a nearly equal time period.
This would mean that the demographic of your audience would be nearly the same, as much as you can control, along with timing and other influencing factors. This would enable you to test the effectiveness of each ad.
While with the proper set up it is easy to test nearly anything, but it is cost prohibitive to test everything. This method must be used selectively with specific goals in mind. You can test:
- Programs and Tactics: Did that ad have an impact?
- Message: Which copy resonated best with our target audience?
- Contact Frequency: How Often should we send emails?
- Spending Levels: What happens if we double our spending?
Using this method correctly can give a great picture of ROI.
Full Marketing Mix
This is a very sophisticated, heavily data-based method that requires a great deal of data gathering and analysis. It also requires some skill to employ, but it is the most accurate way to determine ROI.
It also requires that you consider all of the impacts that might affect your ROI, including the economy, pricing, product quality, distribution, and competitor moves. If you are a large company with a large budget, this method may be right for you.
Tips and Tricks
One of the purposes of marketing is to establish more “touches.” The more places people see you, the more likely they are to buy. One of the toughest things sometimes is to determine from where those touches came.
This can be done through customer surveys as stated above, but those are largely dependent on customer responses. You also need a number of them to get a representative base that is statistically significant. So what other ways can you use to determine where those “touches” came from regardless if they are first, last, or somewhere in between?
SMS Short Codes
An SMS short code is a 5-6 digit number used by a business for customers to opt into their SMS system. Usually, an SMS short code is advertised to consumers in-store, online, or through traditional advertising channels such as digital signage, television, radio or even print.
Using a unique SMS short code for each ad can tell you where exactly a customer was “touched” by your marketing. You can incentivize them to opt in by offering a coupon code or another special offer as in the example below.
This can also be accomplished by the customer sending a unique SMS keyword displayed on the ad to the number. For example, texting “FREE” to a certain SMS short code will trigger a certain response and also let you know where the customer saw the ad.
Just like SMS short codes, you can also offer different coupon codes on different ads. This will let you know which ad the customer saw and was touched by. These coupon codes can vary by any factor from location to time to medium, or all of the above. Suppose if one coupon code is run at 3 p.m. on a digital sign and another is run at 5 p.m. If you get twice as many responses from the one run at 3 p.m., then you know when the optimal time to run an ad on that network is.
This is not to say that the other ad does not have value if you are still getting responses from it. It simply means that the 3 p.m. ad is twice as valuable, provided the message is the same.
Unique Domains or Email Addresses
As with the methods above, a unique domain name or email address to gather responses can be useful to determine where the customer saw your ad, giving you an idea of the ROI in that case.
Regardless of which method you use to track touches, you need to keep in mind that you are likely to know more about first touches or last touches than the ones in the middle. Your prospect may have seen your ad several places before they chose to respond to the SMS short code and opt into your system.
Tracking ROI can be difficult, but the one thing that is sure is if you are not tracking it at all, you will never know the effectiveness of your marketing campaigns. The less effort you spend to do so, the smaller your return and the less accurate your analysis will be.
However, whether it is through digital signage or another method, the primary purpose of marketing is to increase discoverability and those customer touches. All of them have an effect on your overall marketing mix. Tracking them the best you can by using the methods you can afford will help you analyze their effectiveness and what methods you should continue to use.
Questions about how to track your ROI from digital signage? Contact us at firstname.lastname@example.org. We’re here to help your campaign be successful and profitable.