The ABCs of Return on Investment (ROI) Marketing
ROI marketing represents a massive shift away from traditional internet marketing strategies, which consisted of throwing large amounts of money into advertising and other forms of marketing, and hoping to obtain positive results in terms of brand recognition and increasing market share of the product.
The inherent flaw in this system is glaringly obvious: there didn’t exist a reliable way to quantify the results from the money spent and see exactly what impact the advertising budget has on a company’s bottom line.
In today’s fast paced and increasingly competitive business world CEO’s and those with a vested interest want to know in measurable terms how effective the marketing strategy is and more importantly how the customer satisfaction translates into increased profit and better returns for shareholders. Thus evolved systems to optimize marketing spend and measure the impact using a specific set of metrics including Hitslink, which analyzes traffic to site.
The ABC
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 and all this information is put together to give a quantifiable measure of how accurate your advertising is.
The ROI marketing metric has two forms. The first is a short-term method, 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 then to make a decision about the marketing mix and 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 by combining marketing as well as business analytics to measure the benefits created by marketing investments.
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.
