#1 reason why marketers struggle to show ROAS (and how to fix it!)
As digital marketing continues to grow in popularity, businesses are investing more in digital channels such as social media marketing, pay-per-click (PPC) advertising, and email marketing to drive revenue. However, a common challenge that digital marketers face is showing (ROAS) to stakeholders.
ROAS is a critical metric that measures the revenue generated from marketing efforts compared to the cost of those efforts. It provides insights into the effectiveness of marketing campaigns and helps businesses make data-driven decisions about future investments.
Despite the importance of ROAS, many digital marketers struggle to prove it, and the number one reason for this is a lack of clear and consistent tracking and attribution of marketing efforts to revenue/sales.
Your digital marketing efforts cover a wide range of activities, and each of these activities can contribute to conversion in different ways. For example, a customer may first see an ad on Facebook, then browse the website for a while before making a purchase. The purchase may not happen immediately, and the customer may return to the site later through a different channel, making it difficult to accurately attribute the sale - should it be attributed to Facebook or the website?
To overcome this challenge, digital marketers need to implement a robust tracking and attribution system that can monitor customer interactions across multiple channels and devices. This involves using tools such as Google Analytics, tag management systems, and attribution modeling techniques to capture and analyse data.
Google Analytics is a powerful tool that can provide insights into customer behavior, including how customers interact with different marketing channels, which channels lead to conversions, and how long it takes for customers to convert after interacting with your brand. By setting up conversion tracking and goal tracking, digital marketers can gain a better understanding of the customer journey and determine which marketing efforts are performing well.
Tag management systems, such as Google Tag Manager, can simplify the process of adding tracking codes to a website and allow for more granular tracking of customer interactions. This can include tracking clicks on specific buttons, form submissions, and other events that are important for measuring the success of marketing efforts.
Attribution modeling is another technique that can help digital marketers better understand how different marketing channels contribute to revenue. Attribution modeling involves assigning credit to different touchpoints along the customer journey and can provide insights into which marketing channels are most effective at driving revenue.
Start by implementing an end to end tracking model
Define your business goals and KPIs: The first step in implementing an end-to-end tracking model is to define your business goals and key performance indicators (KPIs). This will help you identify the metrics you need to track and measure to achieve your goals. And ensure you aren’t measuring for measurings sake!
Set up your analytics tools: The next step is to set up your analytics tools, such as Google Analytics or Adobe Analytics. This involves creating an account, setting up tracking codes, and configuring your goals and funnels. Making sure that your goals in step 1 are all trackable.
Implement tracking on your website: To track customer interactions on your website, you need to implement tracking codes, such as a Google Analytics tracking code, on your website. This will allow you to track user behavior, including page views, clicks, form submissions, and conversions.
Implement tracking on your marketing channels: To track customer interactions on your marketing channels, you need to implement tracking codes on each channel. For example, to track customer interactions on your Facebook ads, you need to implement the Facebook pixel on your website.
Use UTM parameters: UTMs are tags that you can add to your URLs to track the source, medium, and campaign (and others) of your traffic. This will allow you to track the effectiveness of your marketing campaigns and identify which channels are driving the most traffic and conversions.
Use attribution modeling: Attribution modeling is a technique that helps you assign credit to different touchpoints along the customer journey. This will allow you to understand which marketing channel contributes to your revenue so you can optimise accordingly.
Analyse and optimise: The final step is to analyse your data and optimise your marketing efforts. This involves identifying areas for improvement and making data-driven decisions to improve the effectiveness of your marketing campaigns. This last step is the one that will take the most effort!
Implementing an end-to-end tracking model requires a deep understanding of your business goals, customer journey, and analytics tools, but it is crucial for businesses to be able to make data-driven decisions about their marketing efforts.
We know that the number one reason digital marketers struggle to prove ROAS is usually due to a lack of clear and consistent tracking. But by implementing a robust tracking and attribution system that includes tools such as Google Analytics, tag management systems, and attribution modeling techniques, digital marketers can better understand the customer journey and gather key insights from marketing activity, to ensure time and money are being spent on areas that convert.
Struggling with end to end reporting, or don’t know where to start?
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