Tips for Measuring the ROI of Digital Marketing

social analytics suckIn the bad old days, digital marketing was a free-for-all where instant gurus touted their money-making formulas (usually little better than snake oil salesmen) and deluded followers into spending thousands for coaching programs that didn’t work. Of course, without metrics for measuring the ROI of digital marketing, these gurus continued raking in the money from gullible and desperate businesses.

This isn’t a new problem and it’s unique to digital marketing. As far back as the late 1800’s John Wannamaker is quoted as saying:

Half the money I spend on advertising is wasted; the trouble is I don’t know which half.

Traditional advertising faces a similar problem with companies allocating 60% of their media budget to television when only 18% of TV advertising campaigns generate a positive ROI, according to Nielsen.

Now, of course, digital marketing is much more sophisticated and it’s harder for false gurus to seduce business owners without proving the ROI resulting from their digital marketing programs. Below are results from studies showing the ROI of digital marketing:

ROI of digital marketing

the ROI of digital marketing

  1. A study by Microsoft used big data to measure the ROI of digital marketing both with and without traditional advertising. They found digital marketing outperforms all forms of traditional advertising (TV, print, radio, and outdoor), while combining both resulted in the highest ROI. Thus, digital marketing isn’t an either/ or strategy, but businesses should blend traditional advertising and new media. Also, businesses whose media spend is still focused on traditional advertising should migrate their budgets in favor of digital marketing.
  2. A case study by Google and Dove showed a 6% lift in sales, while combining traditional advertising (TV) with digital marketing resulted in an 11% increase in sales. Interestingly, the study showed the “tide lifts all boats”. In other words, advertising a single product through digital marketing caused an uplift in sales of other Dove products.
  3. Nielsen showed that CPG (Consumer Packaged Goods Companies) demonstrated the positive ROI of digital marketing was nearly 2.8%, with some industries showing an ROI of over 5% — not too shabby.

The state of ROI assessment

The state of ROI assessment is dismal, according to the Fournaise Marketing Group, which found:

Nine out of ten (90%) global marketers are not trained to calculate return on investment (ROI), and 80% struggle with being able to properly demonstrate to their management the business effectiveness of their spending, campaigns and activities, according to new research.

Why is ROI assessment so bad?

Fournaise CEO identified 2 problems in their study that account for the dismal state of measurement of ROI in digital marketing (or marketing in general, for that matter).

The first is the poor training of marketing majors in assessment of marketing ROI and the second is the influx of non-marketing majors into the marketing discipline (over 1/2 of all marketing employees have non-marketing degrees, most often in the social sciences). He sums up the problem with this statement:

In other words, every Tom, Dick & Harry is a Marketer, lacking the scientific and financial knowledge necessary to inform and optimize the creative side of Marketing. CEOs have told us again and again: they want ROI Marketers, i.e. 360-degree performance machines trained to deliver (real) business results and prove/optimize ROI. As long as Marketers continue to fail to get trained in, master the use of and optimize Marketing Performance & Marketing ROI, they will struggle to demonstrate to CEOs that they are not ‘money spenders who jump on (and hide) behind the latest fads and blow smoke’, but real business generators

ROI of digital marketing and market performance tips

First, let’s take a look at digital marketing and where it fits within the spectrum of traditional marketing. Here’s a very cool infographic I created with the help of Matt Valvano from Ideas and Pixels — a first-rate graphic designer.

digital marketing strategy

The infographic shows the various elements necessary to achieve positive ROI of digital marketing campaigns. Basically, 2 things account for positive ROI:

  1. bringing more visitors to your store (or estore)
  2. convert more visitors who show up at your store or estore


Unfortunately, many attempts to measure the ROI of digital media focus on these end results, totally ignoring the variety of factors that generate positive outcomes — a very dangerous practice.

Tip #1: Think beyond outcome measures

So, my first power tip for measuring the ROI of digital marketing is understanding the complex set of activities and interrelationships among activities resulting in positive ROI. For instance, a focus on building a social media community backfires quickly if you have problems with customer satisfaction due to poor product performance — all you’ve done is give disgruntled customers a platform for complaining about your product or service.

Tip #2: Measure what matters, not what’s easy

Often you’ll find digital marketers measuring the easy things — likes, clicks. Sure, these things matter (somewhat), but they’re not the most important (or only) important aspects of a successful digital marketing campaign.

First, set clear goals for your digital marketing campaign — goals that go deeper than just outcome performance measures. Then, create KPIs (key performance indicators) related to those goals.

If you’re convinced customer satisfaction impacts market performance (as is the case for most businesses), assessing sentiment makes a lot of sense. But, don’t stop with sentiment analysis — look at the totality of KPIs and measure all of them. Better yet, chart performance across all KPIs over time, which is much more insightful than putting all your faith in point measures.

Tip #3: Metrics aren’t enough

Don’t simply create dashboards with displaying your metrics. Statistics don’t speak for themselves and require interpretation by skilled analysts combining both the art and science of analytics to uncover actionable insights from your metrics.

While we’re on the topic of dashboards, think about issues related to the level of analysis appropriate for different users. For instance, the VP marketing needs a broad overview of metrics related to the entire product bundle, while brand managers need a more detailed view of just the products they handle.

A good dashboard allows users to dive deeper or take a broader overview of metrics. Also, adding the ability for users to create ad hoc reports and alternative visualizations increases the effectiveness of your dashboard.

 Tip #4: Tie compensation to metrics

One of the biggest challenges firms face (once they get over the hurdle of generating meaningful metrics) is translating data into insights then applying those insights to actions. So, it’s a good idea to tie compensation to metrics — this ensures your employees pay close attention to metrics and try to optimize market performance by using insights provided through these metrics.

I have 3 caveats, however, when it comes to tying compensation to metrics:

  1. Balance the compensation to ensure it’s challenging to achieve higher levels of compensation without being too difficult to achieve. If you expect too high an ROI of digital marketing employees (something unrealistic) they won’t try. If the expectation is too low, they’ll leave money on the table by not doing everything possible to optimize your digital marketing campaigns. You also want to pay attention to the degree to which compensation fluctuates based on performance. There should be adequate incentives to optimize the ROI of digital marketing.
  2. Be very careful that you’re compensating employees for metrics that correlate highly with the ROI of digital marketing. Tying compensation with vanity metrics, like # of Facebook Fans, will drive behavior toward achieving a large Facebook fan-base. However, there’s strong evidence that absolute size of your Facebook community matters little while the engagement of your community provides a stronger impact on the ROI of digital marketing. Pay for what matters.
  3. Employees must have control over factors impacting metrics. For instance, marketers might have little control over customer satisfaction if the production department turns out a really crappy product or logistics can’t get the product delivered in a timely manner. Employees quickly become dissatisfied with a compensation plan containing elements they don’t control.

Tip #5: Don’t stop with descriptive analytics

Move past descriptive analytics (how many, how much, how often) to employ predictive analytics.

In essence. predictive analytics build models using big data to uncover relationships among the factors that impact the ROI of digital marketing (or any other variable of interest).

Your turn

What advice and tips do you have for improving the ROI of digital marketing?

Need help?

We welcome the opportunity to show you how we can make your marketing SIZZLE with our data-driven, results-oriented marketing strategies.  Sign up for our FREE newsletter, get the 1st chapter of our book – FREE, or contact us for more information on hiring us.

Hausman and Associates, the publisher of Hausman Marketing Letter, is a full service marketing agency operating at the intersection of marketing and social media.

You might also like:

How To With Pinterest Analytics

brand interest with pinterestAre you using Pinterest yet? Discovered new Pinterest Analytics yet?

If not, you should give it a whirl — especially if your target audience includes women who make up a full 80% of Pinterest users. Last month, Pinterest became an even more awesome social media tool by introducing analytics.

Pinterest Analytics

OK, so Pinterest analytics aren’t really new, but the team introduced enhanced analytics last month.

According to Mashable (read the article linked above), businesses across the globe now have access to:

  • # of users who engage with your brand’s pins
  • where they’re from
  • their interests based on activity on Pinterest
  • offsite data from websites with the Pin It button

Obviously, Pinterest needed to boost their bare bones analytics dashboard in the face of new analytics options at Twitter and Instagram if it wanted to compete with it’s bigger cousins for advertising dollars. I lean heavily toward Facebook advertising with clients just because I not only have better analytics to support the ROI of these efforts, but because of enhanced targeting. At least with better analytics, Pinterest joins my list of preferred digital advertising options presented to clients.

How to use Pinterest Analytics

pinterest analyticsSet-up

You’ll need a business account on Pinterest to use Pinterest Analytics. It’s easy to set up a new business account or you can convert your existing account to a business account (see arrow).

Then, as with many social media analytics tools, you’ll need to install a JAVA snippet that tracks what’s happening on your website.

It used to take a little knowledge to install the tracking code in the head section of your website, but now, you simply add it using the Yoast WordPress SEO plugin — if you’re using WordPress. Otherwise, give it to your developer to install. If you don’t know what you’re doing, going into the coding can create long-term problems for your website performance, so don’t monkey around and, if you do, make a clean backup ahead of time.

Of course, adding the tracking code only gives limited information about how your visitors use the Pin It button, which as all that was available until last month. Now, you also get information about how Pinterest users engage with your PinBoards.

Pinterest Analytics Dashboard

Your Pinterest Analytics Dashboard contains several elements providing insights to help optimize your Pinterest marketing campaigns.

  • An overview of your profile
  • Insights into your audience
  • Performance from your website
  • And, finally, Top Pin impressions

The profile, audience, and website sections (see left) each contain a MORE button (on the right) that provides deeper insights.

Profile - gives you impressions, repins, and clicks from your Pinterest boardpinterest analyticss as tabs.

Audience - this section gives you insights regarding country (and city), language, and gender. In the interests tab, you get something like the image below — not sure why folks using my PinBoards are interested in thigh tattoos, but it’s definitely something worth considering.

Website performance – selecting MORE gives you information about impressions, repins, and clicks using the Pin It button on your website.

pinterest analyticsTop Pin Impressions – this is really insightful information about how much various pins perform. Notice the arrow points to the top performing posts — which is the one generating the most clicks and repins (behaviors) not simply the highest number of impressions (simply displaying the pin).

How to use Pinterest Analytics

Having all this data is great, but doing something with it is what counts!

So, how do you use Pinterest Analytics to increase your ROI?

Good question — and the right one. Data doesn’t increase ROI, it’s what you do with it that does.

Know your audience

What’s important to them?

Who are they?

Where do they live?

It’s important to know your audience in any marketing campaign. Knowing your audience gives insights into which images are likely to perform better (in general, folks buy from folks who look like them), when to pin (although pinning is less time sensitive, it’s good to pin when folks are checking out Pinterest rather than sleeping), and what product likely appeal to them (based on hypothetical lifestyle).

The interest information comes in handy in lots of ways. For instance, remember the weird result that my community is interested in thigh tattoos. As a social media agency, I don’t have a lot to say about thigh tattoos, but I can use images containing thigh tattoos in my posts to stimulate interest. Or, I can construct a post using a thigh tattoo as a simile for something business-related.

Knowing your audience should also suggest other marketing tactics for success, such as changing your product lineup to align more closely with your audience. For instance, if your audience is older women in urban areas, maybe you use that information to develop or buy products that fit that lifestyle, such as stylish bags to bring home groceries.

Pin performance

You get pin performance data from your website, your profile and across your PinBoards. Use this information to guide future Pins. For instance, test out several product images then settle on the one generating the best performance on Pinterest — ie. most clicks, most Re-Pins.

If you’ve set up your Google Analytics with goal completions and funnels, you can segment performance based on source to even determine which Pin image converts best.

Your turn



I’m here to help. Just post them in the section below.

You might also like:

Traditional Media and Social Media: It’s NOT a Choice

combining traditional media and social mediaSocial media (or new media) gets so much hype and traditional media is just so easy to bash that we forget both have their place (and tactics). The real problem comes when businesses rely solely on traditional media, especially when they ignore what’s being said about their brands on social media, or when they use tactics meant for traditional media on their social media platforms.

Traditional media and social media each have their place. Hence, it’s not a choice, but a system that effectively combines both traditional media and social media into 1 campaign that creates superior ROI.

Maybe a little case study will help. Today, I’ll share my client, Groupsurfing, preparing to introduce their first product, hexsee, into the marketplace.

hexsee, combining traditional media and social media

hexsee provides true social interactivity by creating a private layer over any website. Invited users interact in this layer, leaving comments directly over content and moving independently or together across the internet discovering solutions. A bride might use hexsee with her wedding party to discover dresses, venues, or services. A traveler might use hexsee with their family to plan the perfect vacation. A shopper might invite knowledgeable friends to find the perfect product, a sports enthusiast use friends to construct the perfect fantasy football team, a reader might use hexsee for a virtual book club, or a teacher might construct an interactive learning module by combining websites and questions.

When asked to join Groupsurfing on their pre-launch adventures, they already had a logo design and a prototype of the product. My first task was to develop a clear idea of what the product was and determine how to reach their target market. The co-founders were both tech types — engineering and development — and needed a concise way to convey the benefits and uses of hexsee, rather than the technical features.

But, more than that, they needed a strong user base to support valuation.  My goal was to have 10,000 registered users within 6 months.

Strategy before tactics

Even before discussing traditional media and social media, which are really just tactics, it’s important to lay the groundwork. And that means developing a detailed marketing strategy, relying heavily on understanding your product, your competitors, and your likely consumers.

If you’ve never created a marketing strategy, it’s a time-consuming, but necessary step before starting any kind of marketing. I’ve detailed steps for creating a marketing plan in earlier posts. Plus, there’s a slideshare to help — BTW, it’s received over 45,000 views so a bunch of folks must think it’s valuable.



Laura Lake has this to say about branding:

Your brand resides within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot.

Her definition is much more inclusive, and accurate, than the AMA definition of branding, which reduces branding to a design endeavor. According to the AMA, a brand is a:

name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers

Sure, design is important, and consistent use of your design across media helps, but branding is really much more than your logo and name. Branding is the hologram that is your brand — a 3-dimensional image of what your brand is, what it does, what problems it solves, and who it’s meant for.

My goal at hexsee, which already employed a great logo reflective of its name and what it does, was to get that logo onto everything we did and get it in the hands of our target market. So, we ordered t-shirts for team members to wear, water bottles and stickers to put in the hands of buyers, and other promotional items used as incentives to get new subscribers.

But, more important, I built an identity for the brand that resonated with potential users. hexsee went from a product that took a couple of pages to explain, to the simple tagline — true social interactivity — with a 1 line value proposition:

No more cutting and pasting, adventures with friends

Traditional media and social media

Only after you’ve identified your target market (and gotten to know them), your competition, and the market environment are you ready to decide on tactics including communication strategies including traditional media and social media.

Rather than an either or strategy, combining traditional media and social media into an integrated marketing communication strategy works best for many businesses — and hexsee is one of them.

Integrated marketing communication builds on the reality that folks need to see your message several times, in different communication channels, according to Forbes. Even Millenials, the most digitally savvy consumers, combine physical shopping with mobile apps in a single shopping excursion.

Hence, traditional media and social media combine with mobile marketing to form a cohesive marketing strategy. But, don’t try doing the same campaign with the same message in both traditional media and social media. That’s doomed for failure. Instead, craft different campaigns on different platforms to optimize ROI.

Here’s what I’m doing for hexsee, with a target market of time-stressed 25-45 year old women. This strategy mirrors successful aspects used in marketing Twitter and Facebook.

Event marketing

Both Twitter and Facebook focused on capturing users in their local area. The major benefit of a local focus early on is that 1) you’re integrated into the social fabric of your local community and 2) you get a lot more bang for your limited bucks.

And, event marketing really capitalizes on both local benefits.

email marketingWe started demoing the product in local meetup groups, either formally or informally using networking time, to show what we could do.

Using Constant Contact, we created QR Codes and Text-to-Join numbers (text hexsee to 22828)  to build our subscriber base — thus integrating digital and real worlds.

Email marketing

Registrations also initiated an email marketing campaign designed to keep subscribers interested until the product launch (planned for 3 months later) and motivate them to get their friends to subscribe.

Here we used a strategy employed successfully by other businesses — using the law of scarcity to stimulate subscribers. The very nature of hexsee, while not a social network, works by encouraging friends to join. Otherwise, there’s no one to go on adventures with. Email marketing hit this point and, while functionally the software doesn’t require your friends join, we suggested they’d want their own account and spaces in the Beta release were filling up fast — which is really true.

Social networks

hexsee uses Twitter, YouTube, and Google+ for very deliberate reasons. Mainly, I didn’t have the bandwidth to maintain a myriad of social networks, so I chose social networks that fit our needs. I also tapped my personal social networks because they were well established, large, and engaged.

  • Twitter made sense because we could use hashtags coupled with event hashtags to amplify our message.
  • YouTube was essential because we can demo the product and do side-by-side comparisons of how easy it is versus cutting and pasting.
  • Google+ makes sense because it’s Google and Google still controls 70% of search. All those +1’s earned on Google+ impact your SERPs (how close to #1 you show up in search).

Each network uses a different format so I craft individual messages for individual networks — relying heavily on video and images to stimulate interest.

Content marketing is an important part of our strategy. Currently, we’re curating content likely to interest our target market. Our new website features a blog where we’ll also craft content that’s valuable for our target market to drive traffic to the website.


And it worked. Signups went from about 2% to 25% of the audience we reached — a whopping 1250% increase leveraging a budget of only about $500.

Traditional media and social media plans

Of course, we’re not stopping there. We’re planning some interesting guerilla marketing for SXSW in March, some traditional PR after the product launches in December, and continuing strategies that are already working for us.

Stay tuned to see if we’re able to sustain our growth.

Need Help?

Whether you need a complete content marketing strategy or a complete metrics-driven social media strategy, we can fill your digital marketing funnel. We can help you do your own social media marketing better or do it for you with our community managers, strategists, and account executives. You can request a FREE introductory meeting or sign up for my email newsletter to learn more about social media marketing.





You might also like:

Social Media is the Zoo of the Internet

social media is like a zooRetweets, likes, and comments, oh my!

I love taking trips to the Baltimore Aquarium and Philadelphia Zoo because I get to see all the beautiful fish, powerful animals, and how they look in their (albeit man-made) habitats. I can always guarantee a trip to the zoo will be informative and enjoyable. These trips are not unlike sitting on social media for several hours. Whether you “like” the pictures from your friends’ cruise or “retweet” your brother’s tweet: “I have such a headache right now. #Beer #MorningAfter”, your level of engagement is the same as with the lions and penguins; minimal.

The lion may see you, and due to its time in captivity it has learned a trick or two for tourists, but beyond this, the degree of interaction is stifled by the walls separating you from this glorious beast. This mirrors how you interact with your grandmother who posts another picture of her cat. You may leave a text-based comment about how cute Mr. Mittens is in his knitted shirt, but beyond the acknowledgment, there is still a cyber-wall separating you.

In order for users to transcend the confining box of seemingly social media many have begun to reduce their number of connections. For someone to survive a “Facebook friend purge” is quite the accomplishment these days. Unfortunately for me, I still felt like my social media experience wasn’t as social as it could be. That is why I use the new android app, Movy.

Creating social media engagement

Movy creates a richer, deeper experience for social media users by implementing a feature that Twitter, Facebook, and the rest of the social media titans decided to ignore on their platforms; convenient face-to-face communication. Movy gives users the ability to send personalized video messages to anyone, anywhere, at any time. Utilizing a simple interface for one-click-messaging, face-to-face communication has never been easier because Movy is not within the box of time, size, or geographic limitations.

social media is a zooSocial media advocates will love the way Movy facilitates stronger relationships. When you make a Movy profile, people will follow you. From there, you make a post in the public stream (which can be anything that you want to record with your phone) for your followers to then send a message back. It isn’t just a “favorite” or a “share”, it is breaking through the fourth wall and engaging with someone for a truly social experience. Movy is truly the next generation of social media interaction, engagement, and connection.

Don’t get me wrong, I still love going to the zoo. I doubt I will ever get to see a gorilla up close in the wild (I would be terrified if I ever did) so the zoo does have its benefits. However, when it comes to social media, I would much rather engage with my friends and family instead of just watching what they post and tweet from across the information super highway. It’s like how I feel about dolphins, I would much rather swim with them, than just watch them from behind the glass.

Jacob Markiewicz
Jacob Markiewicz

This is a guest post by Jacob Markiewicz

Jacob Markiewicz is a public Relations professional at Joyce Co. and blogger at The JK Vision. He graduated from West Chester University of Pennsylvania with a Bachelor’s in Communication Studies. He studies how marketing, both on social media and off, continues to change and adapt to the emergence of the phrase, “going viral.” His dream is to completely revolutionize an industry and become the gold standard for a campaign, strategy, or communication method. He also has a guilty pleasure to sit down after a long week and relax by watching bad television and playing video games with friends.

You might also like:

Transparency in Twitter: Show Off Your Brand the Right Way

twitter brandingIn just a few years, social media completely revolutionized the business-customer relationship. No longer are businesses thought of as unreachable, emotionless, and faceless monoliths. In an ironic twist, one might even say that public perception has evolved to match modern corporate law: if corporations are people, the public expects them to act like it.

Consumers want to see the people behind the product, the human face on the other side of the customer service line. They want authenticity. They want transparency.

The problem is, many companies haven’t quite caught up to this paradigm shift. The world is changing, and they’re not keeping up. It’s a personality problem that, aside from a few brands, is endemic. Today, we’re going to show you how Twitter can be a tool to increase the public perception of transparency, and help you build a bridge of trust with your customers.

Twitter: The Great Equalizer

Luckily for you, the same tool that raised all these consumer expectations is the tool that will help you fulfill those expectations. Twitter is a powerful tool that can broadcast to a million people or whisper to one. It also is a great equalizer, allowing anyone who wants to the ability to contact you at their will.

This access makes some brand managers uncomfortable, but it’s up to you to use it to your advantage. Each person contacting you is a potential customer, or better yet, a potential fan. Think about it: they’re taking time from their day to tell you something, or ask you a question.

The question is now not if to respond, but how. Here are some rules to follow to make sure that your Twitter communications stay productive, authentic, and transparent.

Let Your Brand’s Personality Shine

twitter the right wayJust as Taco Bell loves to show their quirky, enthusiastic side, so should your brand relish in the opportunity to let your fans know who you really are. Does your company get involved in charity efforts? Tweet about it! Let your followers see a bit into what it is like to be part of your brand.

Even if you don’t have charity work to brag about (and not everyone does), simply allowing your tweets to show a bit more personality can do a lot. Marketers are naturally a cautious type, but it’s important to remember that the internet has a short memory. Don’t be afraid to experiment with tones and characters until you find one that fits your brand and audience. People will appreciate the authenticity and feel like they’ve getting to know the real you.

Respond to Everything You Can

You will find that many times, the customer does not expect an answer, but is simply tweeting his or her enthusiasm into the internet without expectation. In these cases, it’s sometimes enough to favorite or retweet what they wrote, but a personal note never hurt anyone.

Taco Bell is a great example of a brand that knows exactly how to interact with their fans. A quick look at their Twitter page will reveal hundreds of reblogs, them simply reposting messages from enthusiastic fans onto their Twitter page, showcasing their appreciation for the love they get.

Twitter: The Ultimate Tool for Transparency

Every contact point with the consumer has the potential for creating your next biggest fan. Luckily for you, Twitter is a social media service consisting entirely of contact points. Your followers list is a list of people who want to hear what you have to say, and that list of people who mentioned you in a tweet today? That’s your Rolodex. Get in touch, you won’t regret it!

Hilary SmithHilary Smith is an online business journalist with a background in media marketing. In addition to covering the importance of transparency in social media, her writing also covers the process of globalization, the benefits of an effective business communications system, and VoIP technology for unified communications.

You might also like: