It’s 10:00, Do You Know Where Your Marketing Fund Is?
Business owners and executives have a lot to concern themselves with, but at the end of the day their most effective assessment tool is often the bottom line: profit. Unfortunately, not everyone within a firm considers the big picture this same way – in fact, it’s fair to suggest that few employees think this way. This is especially true of marketing departments and agencies who, despite their best efforts, have been struggling for decades to appropriately commoditize their strategies’ impact.
Though silo-ed information and micro perspectives are equally apparent in sales and production departments, the numerical basis of their functionality often warrants them less waywardness. But because traditional marketing was nearly impossible to quantify – how could we accurately measure how many people saw a billboard ad and subsequently bought something? – the efforts therein have gone relatively unmeasured for years.
However, in light of technological improvements and the proliferation of digital strategies, the game of marketing assessment is rapidly changing. We now have the ability to more accurately determine the dollar value contribution that marketing offers to a firm’s bottom line.
By defining the value generated by a lead minus how much it costs to attract a lead, we can effectively assign a functional dollar impact to marketing. This is the equation more clearly spelled out:
Gross Profit Per Lead – Marketing Spend to Attain Lead = Marketing Contribution
Unfortunately, many organizations that have begun to engage this equation are finding that their digital marketing efforts aren’t nearly as fruitful as previously supposed. The reason? Because for most, quality digital marketing is still a work in progress. The rules and common logic that applied in traditional marketing, while still useful in their own right, don’t always apply to digital. Nevertheless, too many firms have been operating on faulty assumptions about just how much it really costs them to attain a lead or in how valuable that lead really was.
What’s more, in light of the recent significant changes in digital marketing (most notably the Panda and Penguin updates), many are finding themselves behind the eight ball altogether. A lot of the predominant SEO tactics from the last five years, like unnatural keyword text, content spinning, and ninja link building, have all been vastly devalued. Consequently, many companies have now been tasked with simultaneously fixing the damage of years past while rebuilding and executing completely new digital strategies.
So the question for business owners and executives then becomes, “What do I do? ” The most important step is to engrain the need for greater transparency and measurement in your marketing team. For those relying on an outside agency, it’s critical that you assess their work through this new metric. If they’re unwilling or “unable ” to provide the necessary data to do so, you’re likely working with a firm that doesn’t really know what they’re doing.
Next, make sure that whomever is in charge of your digital marketing strategy understands (a) quality link building, (b) quality content, and (c) the importance of authorship. Finally, ensure that your digital strategy is aligned with your organizational strategy and goals. Too often we provide our marketing teams with only initial instruction and then send them out into the world unleashed. Without continuous monitoring and feedback, we cannot possibly know if we’re truly getting the biggest bang for our marketing buck.
About the Author: Peter Dean is an avid tri-athlete, reputable business consultant, and serial entrepreneur, possessing nearly two decades of experience in marketing, management, e-commerce, and business development. Since leaving his global roles at FedEx and DHL where he brought in more than $45 million in new sales, he has developed a number of successful start-ups including RenderTribe, a New York-based internet marketing company that specializes in helping local and national companies emerge as leaders in the online space.