We often associate paid advertising with slick visuals and catchy copy, but even the most memorable ads aren’t worth the expenditure without a solid return on investment (ROI).
In the past, it was very difficult to measure ROI for paid advertising because firms couldn’t directly connect results with ads. For example, readers of a magazine may see a firm’s print ad and contact the firm. But the firm had no way of knowing for sure that it was the ad that drove the new leads, or if it was another marketing tactic or outside influence.
Nowadays, advancements in the ways advertising is designed and delivered, particularly online, makes it possible to track results of advertising campaigns and measure ROI.
Advertising Options Include Traditional and Online Channels
So what are your options for advertising your firm?
- Industry publications and websites, as this is where your audience congregates.
- Radio can be worth a try if you’re targeting your local area, and can be tracked easily with unique phone numbers for each ad campaign.
- Social media is a growing platform for advertising, with its ability to target users based on demographics, preferences, and geography.
- Options on LinkedIn include LinkedIn ads and sponsored content.
- YouTube, Facebook, and Twitter each contain opportunities for targeting prospects as well.
- Search Engine Marketing (SEM) can be very effective by connecting advertising with targeted search terms entered into search engines. Google AdWords, as well as Bing and Yahoo, can all yield significant returns.
What is ROI and How is it Calculated?
ROI is an expression of the very simple truth that advertising shouldn’t cost more than profits it brings in. A simple ROI calculation looks like this:
The result is a percentage that tells you how your advertising expenses compare to the returns they’re generating.
Don’t forget to include the cost of the time and resources to develop ads as well as setting up and maintaining advertising campaigns into your investment figure. This is in addition to the amount spent on running the ads.
Keep in mind that leads take time to pan out. Your returns could follow your investment by weeks or even months—so don’t rush to calculate your ROI too quickly.
How to Track Advertising Investment and Return
1) Maintain Detailed Records for Each Ad Campaign
The trick to tracking your ROI is to keep careful records for each advertising campaign, including:
- What ads are placed
- Where ads are placed
- When ads are placed
- Dollar amount of investment in the ad campaign
- Dollar amount of sales that result from the ad campaign
If you’re not using a CRM or marketing automation system, keeping these records in a spreadsheet is helpful.
2) Create Unique Landing Pages, Web Forms, and Confirmation Pages for Each Ad Campaign
This enables you to benefit from:
- Accurate data. Gathering and measuring the visitors to these landing pages, and conversions that take place on the landing pages, is easy, particularly when marketing automation, customer relationship management (CRM), Google Analytics, or other analytics solution is used.
- Custom/relevant messaging. Depending on where your audiences are coming from, you might have specific messaging that speaks to them.
- Custom/relevant offers. Just as with specific messages, you might have offers for particular audiences. You can tailor offers, such as downloadable content, to each campaign, delivering specifics that are relevant to your various audiences.
3) Create Unique “Tags” on Forms in Marketing Automation and/or CRM Solutions
In addition to using unique forms for each ad campaign, there are marketing automation and CRM solutions that will enable you to have unique “tags” on forms – hidden fields that visitors can’t see.
Now when visitors submit web forms and a contact record for each prospect is created in your marketing automation or CRM system, the contact record will include the unique tag.
Tracking the success of paid advertising then becomes a simple matter of searching the contact records for the unique tags to see who came from which advertising source.
4) Use Unique Phone Numbers for Each Ad Campaign
Unique phone numbers enable you to know what ad prospects saw that prompted them to call. Often, these phone numbers can be tracked in detail, such as when the call was made, if it was answered, and how long the call lasted (a good starting place for tracking the ability of your business development team to engage prospects on the phone).
This information can then be entered into whatever system or spreadsheet you’re using to keep records.
5) Continuous Tracking and Optimization of Paid Advertising is Key to Long-Term ROI
A final cautionary note: Paid advertising isn’t “set it and forget it.” The point of finding ways to track ROI is to have actionable information. If something isn’t paying for itself, use the actionable information to change it.
Try A/B testing (in a nutshell, this means making single changes in an ad and measuring differences in performance). Even very small adjustments can bring about significant changes in your conversion rate.
Review your results regularly, but not daily—this will drive you crazy and make you react when you should still be gathering info.
The most important thing to remember is that long-term trends are what matter. You might lose a few dollars on an ad. That’s fine as long as you learn from it and make changes in order to track it, test it, and track it again. Be patient; observe; react when prudent. This kind of continuous results-based optimization will yield the greatest ROI over time.
Remember, that slick visual with the catchy copy can only do its job when it’s in the right place at the right time and saying the right thing to the right audience. Investing in paid advertising can pay off when you can ensure it’s getting the returns it deserves.
How are you using paid advertising for your professional services firm? Any tips or advice to share on how to track results and measure ROI? Please share by submitting a comment.
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