Conversion Funnel Series: Audacious Awareness

We recently kicked off a series of posts about how to use the 2014 Conversion Funnel to improve your marketing strategy and goal-setting. Today we will jump right into the top of the funnel with Awareness.

To set the stage again: the core concept is that different marketing channels reach users at different stages of their decision-making process, and therefore, you need to understand the user's mindset, the Conversion Funnel, and each marketing channel's strengths and weaknesses in relation to those stages, in order to be successful with your marketing. (You can read the full kick-off post here). 

As a reminder, in the world of the Conversion Funnel, you basically reach larger, less-targeted audiences towards the top of the funnel and fewer, more-targeted audiences towards the bottom of the funnel. Each end of the funnel comes with its benefits and its drawbacks, so you need to understand where your goals and strengths lie and optimize all of your channels to work in the ways that they are designed to, together.

Here's our nifty visualization for reference:

Introduction to Awareness

Awareness is a complex topic because it is both the easiest and the hardest element of the Conversion Funnel to fully understand. 

At a peripheral level, it is easy to understand - for many people, this is advertising. Driving awareness is about getting your target audience to know about your product or service and about you as a brand. This is the stage where you can reach the most potential customers.

Awareness can be so powerful as a goal that it motivates advertisers to pay for the production and airtime of Superbowl commercials and all of the supplemental costs associated with it (measurement, additional air-time, related marketing initiatives, etc.). It's what Mad Men is all about. It's the source behind the millions of billboards all over the country. It is what most people were exposed to as children watching Saturday morning cartoons before DVR, Netflix and internet television exploded a few years ago. Awareness advertising is ingrained in our culture. 

Awesome, where do we sign up? you ask...

Not so fast, unfortunately....Channels that drive Awareness are also generally the most expensive channels. They require higher up-front investment than lower-funnel digital channels, and they are the hardest to measure accurately. Therefore, while the creativity and wide reach is often attractive, they are also a risky investment that is not in any way guaranteed to pay off. 

Is Awareness Marketing Necessary?

These days, many companies can achieve sustainable success with minimal investment in the Awareness channels, which is a phenomenon that has developed with the emergence of the digital age. Think about companies like Zappos and Amazon, both of which invested minimally in traditional marketing channels like television and print. Instead, they built their success through being very savvy in converting a higher % of fewer users (who were more highly targeted) lower down on the funnel through digital channels like Search combined with an awesome user experience and competitive prices/policies. 

Over time, they built great relationships with their users throughout all stages of their user interactions, which allowed them to develop a higher lifetime value per customer, which has now allowed them to develop strong brand clout without the help of a Superbowl commercial (they are great examples of the arrow on the Conversion Funnel chart that shows the cycle between post-conversion customer advocacy and brand awareness). Interestingly, now that Amazon has become a more diverse brand, they invest in Awareness channels for new products like the Kindle and Amazon Prime, but at their core they developed primarily with the digital-focused strategy.

Amazon's transition into more Awareness advertising demonstrates an important point: whether similar success is possible is highly dependent on industry and business model. When Amazon was a price-competitive e-commerce company, they were able to be quite successful with lower-funnel advertising. When brand is established somewhere else (such as at the product level, ie you're buying a Nespresso machine from Amazon, so Nespresso has taken on the brand burden and Amazon is winning as the middle-man) or isn't important at all, this technique can work. But now that they are a media company who is launching new-to-market products, they are investing more in traditional Awareness channels, because if no one is aware of and therefore searching for their e-reader, those lower-funnel channels will be severely limited in their scope.

Driving Success

Most traditional marketing formats are optimized to achieve the Awareness goal. They cast a wide net of potential customers, and thus, if successful, they make the entire Conversion Funnel bigger, which could result in a big win, maybe even category ownership.

This is the stage where the magic of a Mad Men creative brainstorm comes in, and where many non-marketers focus their view of what marketing/advertising is as an industry. The creative strategy can make the difference between the Superbowl commercial that people love and keep talking about and the one that falls flat and creates backlash against the un-cool brand that came up with such a stupid concept. 

Life is tough at the top of the funnel. Success can be hard to predict, and while artistry plays an important role, one could argue that truly understanding the customer and the competition and following up with the appropriate budget, focus groups, market research, and measurement strategy may be more important to the full picture of success (check out the NPR Planet Money podcasts here and the follow-up here for an interesting assessment of Lincoln v. Audi's brand strategies to get some background).

Within this unpredictable, expensive environment, while a very successful awareness strategy can simultaneously push users through Awareness, Interest, and Consideration, seamlessly escorting a user closer and closer to the conversion goal, one thing is very predictable: Awareness channels can never take the user all the way through the funnel on their own. 

This is where the hard part comes in: in order for awareness to work, all lower elements in the funnel must be in place to assist and coax the user into reaching their final destination, or else a leak may let all of those users fall out before they make it through. 

Basically, despite a creatively awesome Superbowl commercial, if Cheerios aren't on the shelf at the store when the user wants them, if the price isn't right, or if any number of other elements stands in the way of the conversion, then the creativity and emotional punch of the commercial is meaningless. It's a great starting-point, but it needs to pass the ball to the rest of the channels in order to make the goal.

Real World Examples

Here are two quite different real world examples to demonstrate Awareness channel function and dysfunction:

1) The Big Brand Car case:

In the last conversion funnel post, I mentioned that when I worked at Google, we had a famous case study of a large car company who invested heavily in a Superbowl commercial to launch awareness for their new hybrid car, but didn't invest in marketing channels that supported the rest of the funnel. From a creative perspective, the ad was a win - it struck a chord of nostalgia perfect for an emotional dive deeper into the funnel from Awareness right into Interest. People were talking about it and were taking actions to learn more by Googling terms related to the ad. 

However, this car company did not coordinate its brand and digital channels, and they didn't invest in the digital marketing presence in Search, Display, Social Media or their own website that would have enabled them to seamlessly escort their newly aware and interested prospective customers deeper into the funnel - perhaps through a Search Engine straight to their main brand website, into an engaging social media contest, or to their local dealer's websites with a special Superbowl sale.

They didn't do any of these things. They didn't coordinate internally and didn't support any sort of complementary Search campaign. In the meantime, their primary competitor did somehow anticipate their creative strategy and did create a Search campaign. When engaged users searched for terms relating to their Superbowl commercial, they clicked on the competitor's ads and went straight to the competitor's website. Not only did the company that paid the cost of production and air-time for a Superbowl commercial that was creatively successful not gain the benefits from their investment, their competitor did!

Had they invested in the additional, lower-funnel channels (a Search campaign, contextual display targeted to relevant conversations, a complementary Social Media campaign/contest boosted by Social ads) and optimized them to support the big-budget Awareness campaign, they could have made an epic win. Instead, they wasted the fantastic creative idea and funneled the positive user sentiment to their competitors.

2) The B2B SaaS case:

B2B SaaS companies typically shouldn't run a Superbowl commercial or television commercials at all. Their target audience is such a niche group (professionals with the power to sign contracts & make vendor decisions), that casting the wide, expensive television net is not going to be worth the money for them. The closest example to this would be GoDaddy's yearly Superbowl commercials, however their target audience is not CMOs or CTOs of successful companies, rather it is more an average person or small business owner who does not yet have a web presence - a much wider net than a typical SaaS target customer.

Add to that, the often complex nature of what makes a B2B SaaS company's value proposition stand up against its similarly complex competitors. This is a very different problem than what a big brand CPG company is solving with their Awareness campaigns. A big CPG marketer (like General Mills) is focused on creating a warm and fuzzy feeling that will stick with the user and translate to their purchase of that brand's products over other very similar products at the grocery story (Ex: the Cheerios commercial). A B2B SaaS company doesn't need many tiny purchases from high volumes of people, they need a few large contracts signed by educated professionals. 

So, the B2B SaaS company will first need to identify which Awareness channels are even relevant to them - if not television, then perhaps PR, Trade Events, and LinkedIn Display ads or similar. But before choosing the channels and allocating budgets, the company must understand how their chosen channels are likely to interact. 

Any strategy will need to be targeted to a clearly identified target audience. In the case of targeting higher level marketers of mid- to large- size companies, relevant PR (like a shout-out from Tech Crunch) can help legitimize and get to thousands of industry eyeballs, but likely won't be enough to motivate most target users to actually take an additional action. This is a good awareness channel, but without additional help, it may not coax enough users lower into the funnel. 

LinkedIn Display ads could potentially add to the awareness pool and they can be targeted to users with the appropriate profiles. When paired with mentions in Tech Crunch that already added some legitimacy to the company, these could be even more powerful, but these too are likely not engaging or noticeable enough on their own to motivate most Fortune 500 CMOs to proactively seek more info on the spot (they're busy!). If they do click, the Saas B2B marketer should be ready to pull them into the funnel with an awesome website targeted to their needs and desires. 

Let's now add Trade Events to this mix. Perhaps a group of users has already been exposed to the brand on Tech Crunch, has maybe seen the LinkedIn Display ads, but now they are attending the biggest industry conferences and they can meet the people behind the name. This is an important moment that will bridge the gap between the other awareness channels and the rest of the funnel, and a logo pen is not going to cut it.

In this industry, companies must compete on values like quality of the service -> whether it actually meets the client's business need, and can the client trust that the service and the team will continuously meet their needs and bring only good things from the partnership. 

If the B2B Saas company has the budget and resources, rather than simply representing at existing trade conferences, they have the opportunity to really make a splash - by hosting their own conference. This can the B2B equivalent of a Superbowl commercial, and like a Superbowl commercial, the emotion that the event arouses in the user will be paramount to success or failure. 

If the conference is able to bring respected experts to discuss relevant and timely concepts in a modern, comfortable atmosphere, then the brand has the opportunity for all of the attendees to associate their sense of value with the hosting brand, even when that brand is not the primary speakers. In fact, in general, the brand should not be the speakers, or else the conference will just seem like a marketing ploy. Just like brand awareness tactics for other industries, the key is to plant a relevant, positive sentiment into the target user population based on a targeted assessment of those users' needs, and to then use the awareness foot in the door to coax those users all the way through to the end of the funnel. It won't happen overnight, and indeed, it is not expected to, but with a successful event that drives value for the target user, the B2B SaaS company has its biggest opportunity of the year to associate its brand with expertise and eminence in the industry. 

Addressing these industry requirements should be top of mind in the marketing strategy across all channels, starting with the Awareness ones  - it should permeate the tone of the Display ads, ring through in the PR, and define the marketing materials, case studies, white papers and talking points that are being pushed out through Trade Events and the content of the conference. Content (presentation x substance x relevancy) in this case is going to be key. This is the moment when "sales" and "marketing" are working seamlessly together, with the "sales" team articulating the impeccably planned "marketing" concepts in perfect harmony. The "Sales" team at this moment are themselves a marketing channel. 

Since all of these channels should also have a link to the website, it must also be considered an important representation of these value propositions - in this case, the website itself is marketing, serving as a resource for many weeks or even months while the client considers their options. This is where interim conversion actions can help cultivate the audience, but that is a discussion for a future post about channels farther down in the funnel. 

Conclusions

In describing these Awareness examples, it is almost impossible to discuss the top of the funnel without immediately diving into the follow-ups lower down in the funnel. This is because siloing a discussion to only one section of the funnel just doesn't do justice to the primary importance of understanding and optimizing how all stages of the customer journey work together to coax a newly aware user all the way through purchasing and advocating your service. 

In the end, Awareness channels can be a useful but expensive tool for increasing the pool of potential customers for a company, business or product. In some cases, it is absolutely necessary in order to create a market for something completely new or for breaking into a highly competitive space where big players are already playing with big budgets. In other cases, it is possible for companies to be successful by focusing more heavily on the lower segments of the funnel, while acknowledging that by doing so, the funnel and potential scope may be smaller. 

In upcoming posts, we'll go into more detail about the other sections of the conversion funnel to add more meat to the discussion with more real world examples.

Stay tuned and subscribe for more posts on many other topics near and dear to the 2014 Digital Marketer's heart!

For help customized to your business needs, contact us at www.DigiMarketeer.com!

Social Media Series: Key Takeaways from this week's "Facebook Fraud" media blitz

This week there has been a lot of media attention on Derek Muller, a popular YouTuber who has recently been unhappy with the performance of his Facebook fan page. 

Muller created a couple of "exposé" type videos in which he talks about his problems with Facebook. This week, he discussed an "experiment" that he conducted to "test whether Facebook likes were worth the money." Links to more details and the videos here. 

However, throughout the discussion, the media has overlooked one major detail: both Muller and the BBC reporter, Rory Cellan-Jones, whose work he references, made an obvious, easily preventable, clear anti-best-practice rookie mistake in the set up of their test campaigns that is the primary cause of their "scandalous" problems.

The Mistake

Both Muller and Cellan-Jones targeted their ads to include random developing countries like Pakistan and Egypt and were then shocked and outraged when they paid for clicks from those countries. Those users aren't even relevant and they are clicking! They announced. There must be something CRAZY going on! 

So basically, the root of the complaint is that click fraud exists and that it is particularly prevalent in developing countries - welcome to 1999.

To anyone with even a passing familiarity with digital marketing, this is like making an exposé that investment bankers use spreadsheets. It is not exposing even a tiny morsel of information that is not widely known. It is, in fact, a key part of a long-established ecosystem that marketing professionals and ad platforms optimize every day.

As long as click-based ad platforms have existed, click-fraud has existed and every ad platform has had to invest resources in controlling it. Could Facebook do more to control Click Fraud? Yes. All ad networks can. Click fraud is driven by a revolving door of new gamers, requiring on-going clever and dedicated engineering resources to keep it in check. Is it slightly more puzzling why click fraud would be prevalent on Facebook versus a display ad network where page owners would make money from those fraudulent clicks? Perhaps. 

But ranting about anecdotal examples of click-fraud caused by incorrectly targeted ads is not a smoking gun. It is, in fact, quite a distracting thing to do.

The Real Takeaway

The real takeaway that both Muller and Cellan-Jones missed, to the detriment of their audiences' knowledge, is that properly targeting your ads is a requirement for success on any digital marketing platform, including Facebook. When you don't properly target your ads, you shouldn't be surprised when your new irrelevant traffic isn't useful. This is digital marketing 101.

Targeting countries where you don't actually have users is both ripe for click-fraud, as they both discovered, and it doesn't help their businesses. In Muller's case, had he used his Facebook credits that he used for his "experiment*" to run ads against his target audience (based on location, interest and demographics), he wouldn't have been able to receive clicks from Pakistan. If Facebook had secretly targeted his ads to Pakistan anyway (a much bigger scandal), he would have clearly seen it in his Insights the next day when his US-targeted ads caused an increase in clicks from Pakistan. But this was not his accusation nor his "evidence," this bigger scandal didn't happen. 

What happened was that Muller wasted his test budget targeting ads to the wrong countries, and then gained useless fraudulent followers who then hurt his Edgerank by not engaging with his page content. A cautionary tale perhaps, but again, not a smoking gun.

Perhaps it is Facebook's fault for not making it clear how to geo-target his ads? Perhaps they were implicitly driving click-fraud by making it complicated to limit his location targeting?

I present to you, Exhibit A - The Facebook ad interface, targeting section:

Not only is it very clear how to limit the location targeting of your ads (it is at the TOP of the audience targeting wizard), but the DEFAULT is set to only the US (it knows I am based in the US). This means that it would have taken proactive effort on the part of Muller and Cellan-Jones to add irrelevant countries, which to me indicates that perhaps they were digging for a scandalous story with the hopes that no one would notice that they achieved their irrelevant traffic through their own incorrect targeting strategy.

To me, this whole situation is a cautionary tale in a few important areas:

Learning From The Cautionary Tale

1) Properly geo-target your ads! Don't pay for irrelevant traffic or an irrelevant fan base, it is not good for you in the short or long run! (See the posts on CTR v. ROI and Social Media Must-Do Guidelines for more details on this point, as it is a core principle of digital marketing success).

2) Be wary of uneducated or inexperienced people making claims about how an ad system does or doesn't work. More likely than not, they did something wrong.

3) Don't blame others, including ad networks, when you make an obvious strategic error. It's bad form, and it distracts from your ability to optimize. Muller was so focused on exposing some sort of fraud at the heart of his bad performance that he missed the main learning opportunity - that it is more important than he realized to be careful in how he sets up his ads, and in how he uses a test budget. He is right that he would be better off had he not used the free credits. He is wrong that it is Facebook's fault. He could have easily made that money work for him.

Conclusions

In the end, this is a good reminder to all that there are rippling repercussions for making basic mistakes with digital marketing campaigns, even at a small test-budget scope. The good news is that there are tons of resources out there - from the platforms themselves and from blogs like this one, that can help advertisers avoid such obvious mistakes.

In the meantime, whether the media admits it or not, Muller and Cellan-Jones will have to dig deeper for their Pulitzer-worthy exposé, for user error and classic click-fraud are certainly not news.

Stay tuned and subscribe for more posts on Social Media and many other topics near and dear to the 2014 Digital Marketer's heart!

For help customized to your business needs, contact us at www.DigiMarketeer.com!

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*Muller's "experiment" is by no scientific definition an experiment given that it has no hypothesis, no control, and no comparison of different variables of any kind. The fact that he is a science blogger makes this situation even more puzzling, for he must know the importance of properly structuring an experiment. Read the posts on The Science of Marketing and Scientific Ad Testing for how to apply scientific principles to marketing. 

Marketing Planning, The 2014 Conversion Funnel & You

"The Conversion Funnel" is a commonly used term throughout the marketing and UX world and has been for quite some time; But, what exactly is a conversion funnel and how can marketers use it to be more strategic about their planning and measurement? In today's post we'll dig right in and kick-off a multi-post series.

Historically, the term "Conversion Funnel" simply described how as a pool of users travels through a conversion process, individuals drop off as the required investment increases.

For example, GoDaddy may run a Superbowl commercial to 100 million people during the Superbowl and another 5 million on YouTube afterwards. Of the people who see the commercial, only a small % will actually be actively interested in their service and an even smaller % will be actively interested in pursuing that service from them (increasing the number of people in those two buckets is what brand advertising is all about). So, of the people who are interested in GoDaddy's service, an even smaller % will take an action, such as searching for GoDaddy on Google. Of those users, only a small % will actually click on GoDaddy's link on Google. Of those users only a small % will actually stay on GoDaddy's site long enough to find a domain, and of those users only a small % will actually purchase a domain. So with each step of the process, more users fall out of the process, thus making the "funnel" shape.

Marketing Meme: First World Problems

Over the years as digital marketing has emerged as the behemoth that it is today, the relevancy of using the conversion funnel as a planning tool has expanded significantly. Different types of marketing, both traditional and digital, work better or worse for reaching users at different stages of the funnel, therefore, understanding which conversion funnel stages a channel is likely to succeed in is necessary to properly plan your budgets, create marketing strategies that will actually work, and set realistic expectations.

For example, print advertising, a traditional channel for "awareness" at the top of the funnel, is not likely to drive strong immediate conversions since most of the users who view the ad are not actively looking for your product or service nor do they have a direct path to pursue your product/service from the ad. Instead, a user would have to proactively Google you, follow you on FB, call you, scan a QR code, etc. and how many people do you know who would put down their magazine to Google something they saw in an ad? Probably not too many. Conversely, Search advertising works well lower down on the funnel because it does make that direct pathway to your site/conversion easier, but it relies on a user already having an initial interest in order to search, so it is not likely to be successful as your primary "awareness" source. 

Check out this version of the Conversion Funnel that I created to help us understand the channel x funnel planning method:

The 2014 Conversion Funnel for Marketing Planning

Within this environment, one channel can have a helping "halo" effect on others and all are most successful when used in holistic harmony with each other. This is why marketing organizations that silo Digital from Brand marketing often run into so much trouble - what's the point of all that artistic energy going into an awesome Superbowl commercial if your digital channels are not set-up to capture and cultivate the online traffic that your ad generated?

Many years ago when I worked at Google we had a famous case study of a large car company who had made just this mistake and paid dearly for it. This company ran a very engaging, creative Superbowl commercial to launch their new hybrid car. They used a popular muppet and beloved song and successfully drove viewers onto the internet for follow-up - just the kind of response they had hoped for. However, this car company made a huge strategic mistake. They didn't coordinate internally and didn't support any sort of complementary Search campaign. To make it worse, their primary competitor had somehow anticipated their creative strategy and had created a Search campaign. Guess what happened when engaged users searched for terms relating to their Superbowl commercial? That's right, those users clicked on the competitor's ads and went straight to the competitor's website. This doesn't even qualify as a fumble, because the Brand team didn't throw the ball in the first place - the Digital team didn't even have a chance to drop it. 

This story happened about 7 years ago, back when Twitter was a fetus, Facebook was an infant, and many big brands were still debating the merits of digital advertising with Google. Yet, I have seen similar examples within the last year. Some organizations or individual marketers for one reason or another choose to focus on a siloed view of marketing channels, to the detriment of their own channels and to the company's overall marketing success. 

Don't let this happen to you!

In the coming weeks, we will continue to discuss using the Conversion Funnel for 2014 Marketing Planning in more detail, doing a deep dive into planning for each stage of the conversion funnel with real world examples. 

Stay tuned and subscribe for more posts on many other topics near and dear to the 2014 Digital Marketer's heart!

For help customized to your business needs, contact us at www.DigiMarketeer.com!

The Science of Marketing: Five Measurement Musts

Over the years, I have met many business owners and marketers who have launched a big initiative or marketing channel without a clear enough picture of how they would define and measure success.

More often than not, they ended up with a spent budget and an unclear picture of how to decide if it was worth it, sometimes with no sense of how they could improve performance in the future. 

Marketing Meme: Most Interesting Man

Don't let this happen to you!

Here are my 5 Marketing Measurement Musts:

1) Know what you're trying to measure and how you will measure it before you launch. 

Before creating any marketing assets or committing to any budget, you should know what your marketing objective is - not just "to make more money" or "to grow," but what the actual actions are that a user must take in your business environment in order for you to be successful. Is it a purchase? An email sign-up? Following your fan page? Time browsing your site? All of the above (you'll need to prioritize)?

Step one is to know what these important actions are, what your primary conversion action is (if you can only optimize for one which will it be) and to have a sense of how valuable you think each action is to you. In the case of a purchase or lead, the immediate click-based conversion can be quite simple to measure, but for something like an email sign-up or fan page follow, you are valuing an initial action that sets a user up for future actions/purchases which means that you will have at least a 2-stage measurement - the immediate action and the later action.

Step Two is equally important -> Be set up to actually measure these conversion actions within your website and your marketing environment. All too often this step is incomplete due to the fact that it requires some sort of technical implementation, such as adding Analytics tags or a conversion pixel. But don't let this step go unfinished, because knowing what you are trying to achieve is not going to help you if you can't measure whether you are actually achieving it.

If you are measuring revenue/conversions for AdWords, you should be set up through a combination of Google Analytics and pixel-based Google conversion tracking that presents its data right in the AdWords Interface (they show you different views, often the AdWords account view is easier to work with, but it doesn't show you data like "time on site" or "bounce rate" which is why the combination of Analytics + conversion tracking is ideal). 

If you are managing Social Media or Display Ads, make sure that your agencies and partners are integrated with your in-house measurement systems enough that you can have a fair and accurate view of the data. Make sure that before you launch, you have set your own expectations of how a channel will perform in comparison to another -> if you are already running Search ads and are now launching Display, expect to see higher Display/Social impressions and fewer clicks than in Search. Your clicks may be less likely to convert or may take longer to convert because the users viewing a Display or Social Media ad, generally, are not as ready to convert as their counterparts who are actively searching for your product on a search engine.

If your conversion action can't be easily measured online (like if it's in-store visits), plan for how you will measure success in the immediate (such as traffic to a certain page of your website or printing of a coupon) and in the long run (use of that coupon in store), and have a measurement system in place that can manage and link the data.

In the case of a traditional-first campaign supported by digital channels, use the techniques available to you to drive digital behavior, but understand the limitations of your available measurement. Are you running a local NPR campaign? Standard practice is to use a special URL in the on-air reading, but only a % of users will use that URL. Just looking at the URL traffic in Analytics or weblogs will not demonstrate the overall impact of the initiative. Pairing that campaign with outdoor bus ads with consistent messaging customized to your target customer's wants and needs? Good idea! But understand that they are intended to work together - hearing the brand message on NPR and then seeing the bus ads will often drive one measurable action (or an action that doesn't have an online footprint at all for companies whose primary conversion is offline).

NPS and other third party measurements can help you understand the efficacy of certain brand initiatives, as can using test and control DMAs, but only if you are operating in multiple markets (for example, running an NPR campaign in ten target cities, while comparing results to ten similar control cities that don't have the NPR campaign). Additionally, for brands that cultivate longer term relationships and loyalty from customers, post-interaction surveys, and/or conversations with sales teams (such is in local B&M stores) can add additional context.

Overall, when it comes to measuring online+offline initiatives, you should:
-have a clear idea of how online and offline interact
-create a list of expected proxy metrics and have a clear idea of their limitations
-understand what data you can and can't get and set your targets accordingly
-don't necessarily avoid an initiative just because you can't measure a click -> think innovatively about how you can supplement the offline experience with online, and what tools you have to gather additional customer/user behavior data after the desired action is taken (loyalty cards, coupons, social sharing/"buzz" incl. use of your hashtags, QR codes, branded searches, post transactional surveys, etc. can all add to your picture).

From a short and long term perspective, you’ll need to decide how you want to value impressions, clicks/visits, page views, time on site, foot traffic, interim online actions, social shares, and conversions. Depending on your business model, these metrics will have very different values to you.

2) Gather enough data to make informed decisions. 

The longer your ads run, the more data you have, and the more likely it is to be accurate and to drown out noise caused by micro-environments and external variables (review this post about correlation v. causation for more detail on this point). Plotting your performance data on a day of week, week over week, and year over year basis can help you understand your trends and reduce the impact of common seasonal and environmental variables. 

When deciding how much data is the right amount, you need to know your conversion funnel and how long it takes for your target user to convert. Are you selling something expensive or aiming for a conversion that requires an initial investment from the user (such as a paid subscription or extensively filled-out profile)? Expect your users to take longer than a moment to decide whether to convert - they may return as many as 10 times over as long as a year or two depending on your business before they convert. 

Using an Analytics system (including Google Analytics which is free) can be very helpful for understanding what users are doing on your site before and after conversion, so that you can optimize to address their needs. If users are bouncing in very high numbers immediately upon landing on your site, either you are bringing irrelevant traffic or you are turning them off with something on your landing page. Are users doing a lot of research, browsing many areas of the site before deciding to convert? Are they bouncing when they reach your checkout/payment page? A lot can happen in a user path before a user finally converts, so only looking at your marketing traffic + conversion rates isn't going to show you the whole picture. Run your marketing long enough to learn in a statistically significant way what your users are doing, and coordinate your user experience optimization to test and address any potential site issues while your marketing traffic is still coming through.  

Don’t make hasty or wildly generalized decisions based on small samples of data, even if you feel pressure to act quickly - no optimization action is better than a misinformed one. If that means you have to wait another month to have a proper sample, then you should wait another month. 

That said, if your performance is consistently terrible, you should pause and evaluate: 

1) are you measuring the right conversion

2) is your marketing strategy set up for success

3) is your measurement technically set-up correctly. 

If you see consistent terrible performance, you should turn off your test and re-evaluate because a) you will need that budget for a future, better test, and b) all ad platforms keep a quality score of you as an advertiser and consistent terrible performance (especially from a CTR/user engagement perspective*) can hurt your ability to affordably show ads in the future. 

3) Don't just review CTR data, review ROI data in the same context. 

Sometimes you’ll see an explosion in CTR while your ROI goes down, or mediocre CTR with an awesome ROI. This dynamic is caused by the push and pull between bringing in relevant users and bringing in all users who see your ad. For most digital marketing, you should be aiming to limit your traffic to those target users who are most likely to click and convert, unless you are measuring an alternative to conversion such as pure impressions on relevant sites (common in brand advertising). In most cases, you will need to understand how your CTR and ROI are interacting and optimize to balance them (check out the ROI v. CTR post for tips). 

Conversions per click, revenue per click and conversions/revenue per impression are good metrics to play with and can be calculated with the data in most ad platform reporting centers as long as you have conversion tracking set-up properly. This is one additional example of why you need to have your measurement system set up before you launch - if you are not set up to measure these metrics, you will have a very hard time deciding whether the clicks you're paying for are helping you. 

4) Act on your findings. 

Over time, when you see that a particular ad or keyword variation is consistently doing poorly, dump it, pause it, or optimize it. 

In ad testing, if there is a clear split in which one language set or image ad is doing better in some contexts and not others, then you can take advantage of your well-designed campaign structure with numerous small thematic niche test groups (relevant in Search, Display, Re-targeting, Social Media ads and Email marketing) by creating segmented buckets for future testing. Group similarly performing test groups together when you look at the performance data and compare that to the established performance view of thematic groupings.

For example, to use our e-commerce apparel retailer as an example, perhaps you are running Search and Contextual Display ads with each ad group specific to brand x style (ad groups for each: gucci boots, gucci heels, nine west boots, nine west heels, etc.). You can look at performance ad group by ad group, and then you can look at higher level groupings - how does a particular ad text or image ad do for all of your luxury brand ad groups v. your middle-tier brand ad groups? Perhaps there is stronger commonality in performance by brand than by style or vice versa. Perhaps brand is more important in Search but style is more important in Display due to the power of the image relevancy. 

Whichever trends you notice, you will immediately understand an important distinction about your users' priorities that you can then apply in future marketing channel planning, campaign structure and ad optimization.

5) Segment and measure incremental impact. 

Now we're getting advanced! If you already had some ads running and your goal of a new launch was to improve clicks, revenue, or ROI, you can often measure the incremental impact** of your ad testing efforts. 

Example:
For Search ads which run in an equally rotating test environment with a goal of revenue (see the Ad Magic post for more details):

Take the CTR, conversion rates and AOVs (average order values) of your original ads within the same ad groups (your "controls") and apply them to the impressions that showed for your new ads during a designated test period (data for tests and controls should *both* be from this time period). Applying the control CTR to the test impressions will give you a "would have been" clicks metric (the clicks you would have achieved with those impressions had your test not launched). Applying control conversion rates to those clicks will show you a "would have been" conversions metric and then applying the control AOV to those conversions will give you a "would have been" revenue metric. If you only care about clicks, you can do a simple comparison by applying the CTR of your original ads to the test group's impressions to see how many clicks you likely would have had if you had not launched your test group (note that all clicks are not equal, and without a further relevancy/conversion metric you will be limited in your understanding of whether the increase or decrease in clicks was good). These types of "would have been" comparisons will quickly show you whether your ad testing has had an overall positive or negative impact because you can view the "would have been" against the "what actually was" and instantly see the results.

You can use this same comparison technique on larger thematic segments, by grouping sets of ad groups or ads that have some similarity into segments and comparing the test v. control data within the segments. 

Back to the shoe retailer example: if the retailer has control and test ads across all of their ad groups running at the same time, they could look at the test v. control data using the technique above for brand segments (how did the new ads drive revenue for luxury -> Gucci + Burberry + Prada ad groups versus mid-tier brands -> nine west, enzo angiolini, clarks, etc.), style segments (did the new ads drive revenue for boots, high heels, etc.) and whatever other relevant groupings the the advertiser may want to view. Perhaps, for example, sale language worked well for the mid-tier brands but had a negative impact on the luxury brands. Perhaps it did well for boots but not for high heels, etc.

This technique can give you a holistic picture of segment performance without having to analyze every individual ad in a campaign and can be a good solution to individual ads not having enough data to be statistically significant. Be careful though, to make sure that there aren't individual performance outliers that are swaying your data.

A similar approach can work with other digital channels as well, but you have to make sure when you are comparing test and control groups, that your "control" is really a control, meaning that the performance to which you're comparing your new launch does is not influenced differently than your new ads by major external variables (see Correlation v. Causation post for more details). 

Nothing gains support of executives more than being able to show that your marketing test just made the company $1million of incremental revenue.

Conclusions

The beauty and the pain of digital marketing is that it is measurable, in many ways far more measurable than any previous marketing platform. But with great numbers, comes great responsibility. 

Plan ahead, know what your objective is and how to measure it, and in no time you will have the digital marketing world at your fingertips. You will never again scratch your head wondering how you could have managed to spend up a budget so quickly without even clean data to show for it.

Stay tuned and subscribe for more posts on many other topics near and dear to the 2014 Digital Marketer's heart!

For help customized to your business needs, contact us at www.DigiMarketeer.com!

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*See the post on ROI v. CTR for more details.
**In this context "incremental impact" means that we are looking for measurable increase or decrease in revenue/conversions that is not just shuffling of data from one channel to another. The "increments" are "increments above or below standard performance." Stay tuned for a future post on common issues facing marketers in measuring "incrementality," such as what to do when your re-targeting ads are "stealing" revenue by shuffling it from the introductory channel (such as Search or Display that originally brought the user to your site) to the re-targeting data (which always targets users who have already been to your site).

Winning The Epic Battle - ROI v. CTR

In any click-based ad system (Google, Facebook, Twitter, most ad networks & re-targeting platforms), advertisers who have high CTRs* are rewarded and advertisers who have low CTRs are punished. 

The platforms describe this as “rewarding relevancy” because they assume that users click on content/ads that they find most relevant (not an inaccurate assumption). It makes sense why the platforms have this system - they are in business because their users have been happy with the relevancy of their content. The less relevant the content, the less frequently users will use the platform, and quickly any of these platforms could be having a painful board call or (gasp!) could become MySpace. It also doesn’t hurt that in most cases either directly or indirectly, the platform is making most of its money from those user clicks, and thus the platforms want to promote as many clicks as possible.

Marketing Meme: Philosoraptor

Yet, as an advertiser, you are the one who is paying the platform for the clicks - you are from whom they are making their money. In a perfect world, you will then be making even more money from the fabulous visitors who came to your site via those clicks and you’ll all live together in perfect cyclical economic harmony.

In reality though, that cyclical kumbaya relationship requires you, the advertiser, to be highly in tune with your ROI needs, and it requires you to draw the line on CTR optimization because the platforms will not. Sometimes high CTR can be detrimental to your business, and you need to find the balance that works for your ROI needs and for your users.

Here are some guidelines to protect your ROI, even when it may prevent maximum CTR:

1) Be savvy about promotional language

One of the easiest ways to drive CTR is to offer an awesome, competitive deal. Offering 50% off will often result in significantly higher CTRs, especially during key holiday periods when users are looking for deals. BUT, before you do this, ask yourself:

• Can we even afford to offer 50% off? (Think of the many businesses destroyed by running Groupon offers that they couldn’t afford).
• Does our target customer consider us a price-competitive commodity or a high-end quality brand? Big discounts can imply lower quality, and can set a precedent to repeat users that they should wait for big sales (think Banana Republic with their constant 40% off offers).**
• Will a customer who buys because of a discount be a return prospect for us? Would we have acquired this customer anyway through other means? (Again, the Groupon example rings clear).

Before stepping out on a discount limb, remember that it is hard to move away once you’ve taken the plunge. Sometimes it’s still worth it, sometimes it’s not. You have to know your business to decide.

2) Avoid overblown or “Up to” claims

Can you offer 50% off on everything that the ad would lead to on the site? If only a few products are 50% off, then users will likely click through from your ad and be disappointed. Annoyed users don’t typically browse for an alternative to what you advertised - they bounce immediately and leave with a bad taste in their mouths. You will not only pay for non-converting clicks, but you might also make their first experience with your brand an untrustworthy one. 

3) Avoid false relevancy

Similar to overblown claims, advertising products when you have very limited or no inventory or services that come with a can of worms can have the same effect. Even something as simple as “Shop Gucci Boots” can be annoying for a user and expensive for you if you don’t actually sell Gucci boots, or if you only have one pair. Don’t require an email sign-up or phone number to even see what your service is. Users remember experiences in which relevant ads led to a feeling of being taken advantage of and they will be highly unlikely to give you a second chance.

4) Avoid confused clicks

Sometimes disruptive ads can drive CTR from startled or confused users. Think about basically all of the mobile ads on Zynga products or those annoying blinking display ads on news websites. The sites/platforms use those ads because they trick the unqualified user into clicking. You don’t want this user. They will associate their annoyance at the disruption with you. Earn their click, and then they will be a loyal customer.

5) Make your landing experience relevant

Even a qualified click can be bad for your ROI if you are landing the user on the wrong page. Keep conversion optimization on your website top of mind at all times. Every user who has a bad experience navigating your site is a lost acquisition that you paid for. Users decide if your site is relevant within seconds, so make those seconds count.

“OK,” you say, “I’ve implemented all of these ROI optimizations, now I have to worry about the platforms punishing my lower CTR, right? My higher CPCs will make all of this work irrelevant because the higher cost per click will reduce my ROI, right? I just can’t win…”

Balancing the battlefield

If your ads and content are showing to relevant users and are following the guidelines above, then increasing your CTR within those strategic constraints will only help your business. Unless you don’t offer something valuable to your target user, you shouldn’t need gambits to drive CTR. 

Here are some non-gambit tips for increasing your relevant CTR:

1. Structure your digital marketing programs (search, display, behavioral targeting, re-targeting, social media) to be highly focused on your target user - don’t cast a wide net, cast numerous niche nets and revel in the rewards.
2. Provide clear relevancy and value to the target user with every pixel/character. Don’t just target the right people, use your knowledge of them to appeal directly to their niche. Make it clear in an instant why you’re God’s gift to them.
3. Use enticing, bright, relevant images whenever possible. Images = clicks. As long as you don’t use something irrelevant, images can be a great way to grab the eye and the click.
4. Test and optimize. Digital platforms are entirely focused on evergreen campaign optimization. Launch something you think will work, gather data, and iterate over time to make it work better.
5. Begin with a roar. Pay more upfront to gain traffic and knowledge and pull back with ROI optimizations later. Show the systems you can produce good CTR, build your high quality history within the platforms, and then use your strategic hand to pull back irrelevant traffic in ROI optimizations later.

Stay tuned and subscribe for more posts on many other topics near and dear to the 2014 Digital Marketer's heart!

For help customized to your business needs, contact us at www.DigiMarketeer.com!

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*Also included in this definition are social engagements - likes, shares, etc. as they are also "clicks."
**Note that if you are focusing on a social platform such as Facebook or Twitter, if your users are not typically engaging with you over sales/deals it is unlikely a sale will drive CTR, it may even reduce your CTR if what they expect from you is interesting content.