Have you ever found yourself confused about how to separate the wheat from the chaff when it comes to
your marketing activity? If the answer is yes, then fear not, because you’re far from alone. There are many businesses just like
that get befuddled when it comes to measuring a Return on Investment (ROI) for marketing activity.

Why is that? You ask.

Great question!

Well, put simply, there are many pieces to the jigsaw that is better known as a marketing campaign.
Each one requires an investment of some sort, be it by time or financial. In layman’s terms, if you want to
market your business (and you should) then it’s going to require an investment. That’s why we have
budgets, right?

Well a budget is only part of it.

The 3 Key Parts To Any Campaign

If your are going to run a marketing campaign (or have some else do it) for your product or service then
there are three key elements where you will need to figure out what your investment looks like and what
the ROI for that particular investment is.

Let’s go through it in closer detail, using a Facebook campaign as an example. And let’s say your end
goal here is to sell a line of newly designed pop culture style t-shirts. What are the three things you are
going to need to invest in and what is the ROI for each.

It starts with Campaign Management

Who is going to manage your campaigns? Is this something you or a member of your team will do, will
you outsource it and perhaps use a professional marketer to look after things for you? This is probably
the toughest of the three elements to consider because the foundation of the marketing campaign relies
on it.

Let’s say you decide to manage it in-house. This is a time investment for your business.

You will need to be confident that your nominated team member has the knowledge and experience to
set up and structure a campaign. This would include building audiences, setting the optimisations of
each campaign – there can be more than one in an entire campaign and each will serve it’s own purpose.

For instance if you optimise for traffic, that won’t guarantee you sales. But if you optimise for just sales,
that won’t guarantee you will get enough traffic to the site. And what should you do about those people
who come to the site and just browse once or twice? How can you turn them in to sales? How will you
track, test and measure? Do you know what your audience will respond to? Do you know the signs of ad
fatigue? Are you sure you want to take this on?

If you don’t, that’s fine because there is no shortage for professional marketers who can help you out
here and they aren’t hard to find. If you do travel that path, then it’s going to be a financial investment.
An outsourced marketer will charge a management fee for set up, ongoing management (test, measure,
review) and reporting. This return on investment here is purely service. Something you are
paying for, that you cannot or do not wish to do.

You NEED GREAT Assets

If you’re going to wow your audience, you’re going to need a great set of assets for the job and right now
the best way to do that is to use video. It’s a way to grab attention, tell your story and drive your audience
to action. Video ads have a higher impact and generate better engagement than a static image does.

Now it’s not rocket science that a video in an ad campaign ninety nine times out of one hundred should be a professionally filmed, edited and produced. It’s a showcase, your showcase. There may be very rare occasions where a raw piece might serve it’s purpose but in all honesty, it would be super niche!

So here is your next investment. A product investment in which you exchange payment for a valuable
asset. Something you can use as an ad, on your website, as content for your social media. It’s an asset.
Investment, Investment but where is my ROI?

By now you’re probably thinking this is starting to sound expensive, you might even be put off. It might
feel complicated and like too much trouble, but by getting these parts right, you are setting yourself up for
success.

And so here we reach the final investment.

Return on Investment: It’s all About the Ad Spend.

Ad spend return on investment (or ROAS – return on ad spend) is where you should be looking when it comes to
managing your true ROI. This is the money that in this example is paid to Facebook inc in exchange for
the opportunity to drive sales for your product. While all the other components come together to build a
campaign, it’s important that the returns on those investments are very different from ad budget. Just like
a jigsaw, you need each piece for the finished product, but only a portion of what you are investing will
generate a return.

In Summary for your return on investment

If you spend $500 on management fees, you are paying for a service, something you cannot do. You can
liken this to your air conditioner. Think of what summer would feel like without one, you pay a
professional technician to service your machine, the ROI is a fully functioning AC that will keep you cool
through summer. But it still needs running costs (Electricity) to provide that comfort.
If you purchase assets, you have something tangible, something you can touch and use. There is your
return on that investment.

And if you spend $1,000 on advertising and sell $5,000 worth of t-shirts or whatever your product or
service might be, that is your campaign ROI. Of course even this can be segregated depending on how
your campaigns are optimised. Remember, at the start of this blog we spoke about paying for traffic and
sales being 2 different things, but you don’t need to think that micro. Just remember what you have learned today.

Good luck!

If you’d like to talk to someone about how you can increase your digital footprint, contact us today! To set up a free, no obligation meeting drop us a line right here. We look forward to hearing from you.