here is my reply:
Hi Nikki, its interesting how you posed the question. Budgets vs. Return on Investment.
I work with business owners all the time to discuss Investing in Marketing, far too often they look at this as an expense (often times this is drilled into them by their CPA or Accounting support system).
It is encouraging to hear you say ROI because that indicates that you believe it to be an investment, and that you want to track and monitor the return on that investment. This is a fantastic thing!
Beware Last Click attribution! - Chaz
What I mean by this is, it’s easy to fall into a direct response analysis mode,
"I send out flyers with coupons and got 10 coupons back",
When for the most part marketing does not work this way and if you apply this kind of analysis you will often times judge the ROI of a campaign as low or even non-existent because you are not acknowledging how the customer journey actually works.
When setting up KPI's for marketing you must look for global things like Increased Revenue , and Brand Lift.
You must do this because the customer journey seldom looks like,
"I saw an ad and bought the product or service."
In 2019 a customer journey looks more like:
1. An event occurred that made me aware of a need,
2. I searched google for info,
3. visited 1 or 2 websites (most likely took no action),
4. discussed with friends and family, possibly on Facebook,
5. went back to work will decide what to do later.
6. Was browsing a news site and saw ads for one of the website I visited and some for sites I did not.
7. reminded that I have a need, I search for info on the companies I remembered from the ads/prior website visits,
8. I visit the companies google my business page or yelp page to check out reviews.
9. I click the website link in yelp revisit the site and bookmark it for after my conversation with spouse,
10. I click the bookmark after making a decision with spouse and submit a form or make a purchase from the company we agreed on.
To what marketing tactic do you assign credit for the sale?
In this example the last click was a Direct traffic action (they entered the website directly using the bookmark) yet the journey included Pay per click, social presence, social ads, local citations/listings, reputation management, Targeted Display ads, and SEO.
If you attribute the sale to something that you could directly connect to someone who typed the web address in directly like say a Business card, or flyer, possibly a referral then you are 100% incorrect and at risk of judging the marketing as ineffective or having a low ROI.
So I am curious about your question... how are you judging ROI?
Over the years that I have been working with businesses on marketing I have found that it is always a blend of tactics that combine to create the best results. That said I always encourage folks to start with the low hanging fruit and add tactics to continuously optimize the overall results.
This almost always starts with PPC (these ads only show when someone has searched for what you do, they are the highest intention target you can possibly address), then Site/search Re-targeting (95% of people who visit a site do nothing the first time they arrive, a re-targeted visitor is 70X more likely to convert). Social Ads/Targeted Display (we can talk to the right audience with these but because there is no search its only by chance that someone in-market sees it.
There are also foundation items that need to be addressed that it’s very difficult to prove ROI for but absolutely make everything you do work better. a Website that is built to convert (vs being pretty), Local Citations and Directories are critical components and there are more to address.
And let’s not forget that for as long as I have been doing this the number one answer to the question of where do your best leads come from is virtually 100% of the time "Word of Mouth/Referrals" so what is our plan to leverage this as a tactic? Knowing that while these leads convert the easiest, the amount of them is always limited, sometimes it is sufficient but if you want to increase your market share and introduce new prospects to your company and services, this is generally not the best way.
I hope this is helpful
Chaz -916.666.3159 call me anytime we can grow your business!