People often assume that marketing has to be a huge, expensive undertaking. Sometimes this is true but not always, especially if you are a small business or new to advertising your company. Either way, if you are doing it right, marketing isn’t an expense; it’s an investment.
Effective marketing is the best way to grow your company, no matter what you do. But, take note of the qualification in that statement, effective marketing, not just any marketing. Any marketing initiative you undertake, especially if you are only beginning to consider the impact of marketing dollars, should always be evaluated both qualitatively and quantitatively. Are you spending an appropriate amount of money in proportion to your total annual revenue? Are you seeing impact from the money you are spending?
Think of marketing like building a garage to improve the equity in a home; your return on that investment should more than make up for the money you are spending. You wouldn’t spend $200,000 adding a garage to a $100,000 house that in the end is only going to be worth $175,000. You would, however, spend $50,000 to add that garage if you knew it was going to raise your home’s value by $75,000. Proportionately, the $50,000 expenditure is what makes logical sense for your home. Ethical marketing operates under the same basic principle. You should not be spending more on a campaign than the campaign is able to return to your company.
After any marketing campaign, remember to sit down and calculate how much profit you can definitively tie to the money you’ve spent. Maybe your budget to spend on said campaign was $20,000. That $20k expense should turn into a $25,000, $30,000, or $40,000 profit. If it doesn’t, then it’s time to reevaluate your marketing strategy.
If you are running a small business or just dipping your toes into marketing, you may not have thought of the importance of tracking every dollar you spend, which is essential to being able to associate it with revenue. Some of the most rudimentary ways to track your marketing efforts include using a physical keyword or promo code on your ads.
A simple keyword, offering a nominal discount or added value item, will allow you to track how many people saw your ad, interacted with it, and, ultimately, responded to your call to action. Every time that code is activated, you can directly tie that transaction to your efforts. Want to get even more granular? Try using a slightly different code on each medium to help you see which type of advertising is the most effective for your company. For instance, let’s say you have a physical storefront and you decide to run a billboard, a print ad, and a social media ad. One could offer code “Welcome 10,” while the next offers code “10 Off,” and the third offers code “Save 10.” This will allow you to effectively determine which mediums net the most sales for your particular business and use that information to inform further purchasing decisions.
As you are ready to start introducing more complex strategies, there are dozens of new and burgeoning technologies on the market, all designed to track which ads are working and which ones aren’t, there are lots of options to evaluate your work, your audience, and your return on investment.
Effectively tracking your marketing campaigns is far more important than the amount of money you are spending. Even if you allocate hundreds of thousands of dollars for placing digital advertising, buying billboards, and running commercials, you aren’t doing your business justice if you don’t know how much of that money actually created results. A small business might have a tiny budget but if you are tripling your investment, it doesn’t matter how small the expenditure was. Besides, every company has to start somewhere.
How can you know when it’s the right time to add more money to your advertising investment if you aren’t evaluating the effectiveness of your existing marketing plan? You can’t.
Need some help? Let’s discover the possibilities together.
