The ABCs of Return on Investment (ROI) Marketing
ROI Marketing represents a massive shift away from traditional internet marketing strategies. These old strategies often consisted of spending large amounts of money on advertising and other forms of marketing, hoping to obtain positive results in terms of brand recognition and increased market share.
The inherent flaw in this method is glaringly obvious: there is not reliable way to quantify the results from the money spent before it is spent. In order to see the impact the advertising budget has on a company’s bottom line, the company must first actually spend that money. This method is a little like shooting flaming arrows into the sky – not sure where they will land or what the effects will be.
For this reason, in today’s fast paced and increasingly competitive business world CEO’s and those with vested interest in companies and to know in measurable and quantifiable terms how effective the proposed marketing strategy will be before any money is spent. More importantly they also want to know how customer satisfaction as a result of the campaign will translate into increased porift and better returns for shareholders.
Thus, systems have evolved to help predict outcomes and measure the impact. There are a number of metrics to use to do this – including Hitslink, which analyzes traffic to site.
The ABCs of ROI and Hitslink
Essentially Hitslink is a service that provides accurate, real time information online regarding who visited the site, what search engines led them to the site. It also can show how the visitors navigated the site, how much time they spent there as well as if they made a purchase or transaction on the site. All this information is put together in a report to give a quantifiable measure of how efficient your advertising efforts really are.
Short Term and Long Term Marketing Metrics
The ROI marketing metric has two forms:
The first is a short-term view, which simply uses an index to compare the dollars of revenue generated by every dollar spent on marketing. The genius of this method lies in its simplicity as it’s easy to look at the figures and use them to make a decision about the marketing mix. From here one can decide on more effective ways to get more bang for your advertising buck.
The second method is slightly more complex as it takes a long-term view and measures less tangible aspects of marketing effectiveness, such as customer loyalty and customer referrals. By combining marketing as well as business analytics to measure the benefits created by marketing investments this method is all encompassing and gives a more accurate picture into the future of the business and its customers.
Why change a winning formula?
For every voice shouting from the rooftops about how wonderful the concepts of ROI marketing and Hitslink are in terms of improving efficiency and competitiveness there is a chorus of dissenting voices shouting the opposite.
They argue that the short-term metric doesn’t include the long-term brand building value gained from communicating with the market. There is also a perception that the long-term metric is overly complicated and thus only suitable for large corporations able to run sophisticated business analytics.
This is the traditional quandary facing businesses globally as they must make choices every day between the known past and the uncertain future. While both arguments have their merits only time will tell whether the future path lies with those who stick with time-honored tried and trusted methods or if fortune will favor those who step boldly into the brave new world to seize all the myriad opportunities it offers.