Every business needs to market its products or services, in order to get new customers, or simply to get new business from existing customers. However, it is also important for businesses to get the maximum bang for their buck. If the marketing spends of a business is more than the revenue generated through it, the business is, eventually, going to become unsustainable. That’s where marketing optimization comes in.
What is Marketing Optimization?
In the pre-internet days, marketing was (mostly) restricted to ads, on television, and in newspapers. Marketers, for the most part, relied on guesswork to calculate if a marketing campaign was successful. There was no sure-shot way of knowing if a particular campaign was the reason people walked into stores or bought a particular product.
The internet changed that. Today, marketers can drill down into the tiniest detail of a marketing campaign, and see what’s working and what’s not. In a nutshell, that’s what marketing optimization is: optimizing the various parts of a marketing campaign to get the most out of your dollars. For instance, in a Facebook ad campaign, several factors can influence the success of the campaign, such as the messaging, the pictures used in the campaign, the targeted demographics, and even the time of the day and week when the ad is displayed. Marketing optimization is the art and science of analyzing all those factors to arrive at the most optimal solution.
Why is Marketing Optimization Important?
No matter how much you’re spending on your marketing, it needs to be money that is working for you. Depending on the size of the company, that number can be in thousands or even millions. The more efficient your marketing strategy is, the higher will be your profit. In fact, marketing optimization can get you closer to your larger business goals. For example, if a SaaS company intends to consolidate its market position, it could run an optimized campaign that’s meant to reduce its churn rate.
How to Start with Marketing Optimization
Data is the building block of marketing optimization. In order to begin optimizing your marketing campaigns, you need to:
- Collect data: The kind of data you collect will depend on the goal(s) of your marketing campaign.
- Gather insights: With the help of data analytics, identify patterns in your customer behavior.
- Make changes: Based on insights gleaned from collected data, tweak the parameters of your campaign.
- Rinse and repeat: Marketing optimization is not a one-time task. It needs to be an ongoing practice, constantly striving to improve results.
Multi-Channel Marketing Optimization
In the world of digital marketing, the customer journey is no longer a linear path. A potential customer is likely to interact with you several times, online and offline, before they make a purchase. For example, someone looking to buy an insurance policy might run a preliminary Google search to gather information. Based on the information, they might shortlist a few companies and call them for more details. Simultaneously, they might also sign up to a newsletter, or interact with an ad of a shortlisted company. It is only after going to and fro between all those touchpoints that a customer will pick an insurance policy to buy.
Typically, the journey of a modern-day consumer can be scattered across the following mediums:
- Social media
- Search engines
- Online advertising
- Direct mail
- Store visit
Challenges of Marketing Optimization
While multi-channel marketing gives businesses an increased number of opportunities to interact with potential customers, it also throws its share of challenges. Achieving consistency in messaging is one. As the audience jumps from one channel to the other, businesses need to deliver messaging that’s consistent with the brand, useful to the customer, and most importantly, engaging across mediums.
However, perhaps the biggest challenge of multi-channel marketing is marketing response attribution. How do you know which channel contributed to the final sale, or what sequence of touchpoints led the customer to purchase from you? Classic analytical tools, such as Google Analytics, aren’t sufficient for the purpose. They give you only one side of the picture.
For instance, Google Analytics will tell you that someone visited your website and signed up for your newsletter. However, is the newsletter subscription leading to eventual sales and revenue generation for the company? Tools such as Google Analytics fail to answer that question. And without that information, you might be shooting your arrows in the dark. For example, if the conversion rate for your newsletter subscription is high, you might pour more money into your Adwords campaign. However, it is possible that most of the newsletter subscribers aren’t buying from you. In such a case, optimizing for only the conversion rate of your landing page isn’t going to get you marketing results.
The Solution for Multi-Channel Marketing Optimization
In order to understand where your money is going, you need to be able to see everything, from click to revenue, for each marketing channel you have. And that calls for a tool that aggregates your data across channels. It should be able to give you a complete picture of your marketing funnel in an easy, accessible way, such that you know where things need to be improved.
Such tools are even more crucial for businesses that, typically, have long sales funnels, such as financial institutions, education businesses, and automobile companies. A good multi-channel marketing optimization tool should give you:
- A user-friendly dashboard that informs you about your marketing performance, at a glance
- An aggregated view of all the channels that you are running your marketing campaigns on
- Predictive analytical capabilities, such as identifying trends in your ad campaigns
- Performance metrics, which are customizable
How to Effectively Measure the Success of Each Channel
You simply must know the ROI (return on investment) of each channel that you use. This allows you to pause campaigns or ramp up the ones that are performing well. If your budget is smaller, this allows you to get the most return on your investment without spending unnecessary money on campaigns that are stagnant or under-performing.
According to Katie Jansen on Forbes:
No matter what platform you’re marketing on — mobile, Apple TV or anywhere else — the most important metric is ROI. Impressions don’t matter if people aren’t converting, conversions don’t matter if people aren’t engaging, and engagement doesn’t matter if people aren’t spending. Your media buying strategy must lead to measurable profit for your business.
How to Win at Marketing Optimization
Winning the marketing optimization game requires having all of your data where you can see it working for or against you. Doing so helps you improve ROI and achieve short-term goals. However, having the complete picture also helps you build a consistent narrative across channels, which is crucial for brand building. And it is only strong brands that are able to build a loyal following, which is important for sustainability.
While automation tools can aid the process of marketing optimization, it still remains a complex task. With newer technologies emerging and customers’ attention spans consistently on the decline, the task of marketers, today, is tougher than ever. At IronFocus, we have experts that breathe marketing analytics. We can help you optimize your marketing strategy, so you have more time to focus on your business. Work with industry professionals who have extensive experience in marketing, analytics, and data.