According to The Communications Channel, digital now accounts for 17% of Australian marketing spend, becoming an important marketing channel for many businesses. Today, marketers - small and large - are required to come together with agencies and make decisions about digital marketing. What quickly becomes clear is that there is a confusing array of options and skill sets available for hire.
Conventional wisdom suggests that for both traditional creative and media agency selection, a marketing budget of around $500,000 is necessary to justify the use of an agency. However, the digital landscape is changing rapidly and for some sectors such as hospitality and highly competitive areas such as removalists, a marketing spend of $5,000 - $20,000 a month is typical, and many are adding a percentage for a digital marketing agency in order to manage their advertising spend carefully.
A medium sized restaurant chain - say three or four locations - might have a marketing budget of $100 - $150,000 a year. They might be across social media with a general Facebook Page and a Twitter handle for each of its locations, while also using Pinterest, Instagram, and Google+ to tease the taste buds of its customers. It may also post on YouTube. Developing and posting the content across the chain is a big job and it’s rarely going to be the business owner’s.
There are many digital campaign types to consider. Cost per click (CPC), cost per acquisition (CPA), cost per thousand (CPM) and cost per engagement (CPE). One of the most popular tools for small businesses is Google’s AdWords which can place you in front of a potentially large audience. Increasing traffic to your website is one of the most popular ways to expose your business to new customers, create new sales, and boost your company’s revenue. When used alongside SEO, pay per click (PPC) advertising, also known as cost per click (CPC) advertising, is an excellent way to create a well-rounded marketing strategy.
Mistakes are costly
Coming up with keywords is often a time-consuming project and can be very frustrating. Mistakes that waste time and money are endemic, but the good news is that Google has a keyword tool that can help. The first mistake is to have a list of less targeted keywords. PPC campaigns depend on the keyword list on which you bid to get your adverts displayed. Visitors then click on these ads and are directed to your website, where you can engage them in a sales process. A keyword list is literally your means of prospecting for customers. For example, if you target the term "taxes" for your financial or investment business, you’ll likely get poor results.
Another mistake is the failure to identify a unique aspect of your product or service (Unique Selling Proposition). All tax returns are essentially the same - they lead to paying taxes - yet there is that thing that makes each uniquely different. Does your tax prep lead to tax savings? Do you always get returns filed on time? Always present the unique side of your product or service because that is what sells, makes your advert stand out, and gives a surfer reason enough to click it.
What is important, is your return on investment (ROI). One of the tenets behind a digital marketing program is that it’s not about the next sale to a customer, rather a customer has (or should have) a lifetime value. That’s the amount of revenue you’ll generate from one customer over the lifetime of your engagement with them minus your costs to acquire them and then service them over time. Businesses looking to get the best results possible from their digital marketing efforts need to thoroughly understand the landscape and how to clearly articulate their requirements.
- Seek out at least two agencies to brief.
- Determine the ROI of any digital marketing spend and the evaluation criteria for the agency. To calculate your ROI (where “I’ is the dollars spent on digital marketing PLUS the cost of the agency) when you don’t directly sell online, you need to know the value of a lead to you.
- Take the number of leads generated over a given period and divide that by the number of new customers generated from those leads. Let’s say in the past 12 months you have had 300 leads and 100 sales. Your lead conversion rate is 100/300 = 30%. If your lifetime value of a customer is $1000 then a lead is worth 30% of $1000 = $300. This means that every lead generated from your digital marketing effort is worth $300 to you.