Members of the Pole Position Marketing pit crew answer your web marketing questions from their unique perspectives, with a “bonus lap” by a guest industry pro.
Have a question you’d like answered? Ask the pit crew!
Today’s Question: How Do I Know If My Online Efforts Are Profitable?
Stoney deGeyter’s Answer from an SEO Perspective:
I would like to say that the answer to this question can be summarized by asking, “Are you getting the results you expected?” but, too often that answer is “No,” regardless of how well the web marketing efforts are doing. Ultimately, your success comes down to five things:
- Defining success: If you haven’t defined it, how do you know if you achieved it?
- Knowing your starting point: You may not be starting at the end of the line, but you are most likely not taking off from the front. Unless you know where you’re starting from, you won’t understand how much work lies ahead for you to reach the finish line.
- Your aggressiveness: Success in anything is dictated largely by how aggressive we are in going after it. As the saying goes, you get out what you put in. But online, our level of aggressiveness is often limited by available budget. The less aggressive you are, the harder it will be and the longer it will take to get results.
- Your competition: You have competitors on the field with you and each of them is operating at a certain competitive level. If yours is higher, you’ll (at some point) overtake them. If not, you’ll never beat them.
- Your expectations: If you have set improper expectations for how and when you’ll achieve success, you’ll always be disappointed with the results, regardless of how positive they are. Proper expectations allow you to see the success regardless of what it is.
Most web marketing campaigns are not immediately profitable. In fact, it can take as much as 12 months to get to that profitability level. But if you keep the points above in mind, you’ll have a clearer picture of what success is and when it will be achieved.
Kathy Gray’s Answer from a Social Media Perspective:
Profitability is a tricky question when it comes to social media. How much is a like or share worth? Often it’s hard to track and show a direct link between social media and sales or profit because social media is more effective with the assist than the direct sale. This is where having clear-cut goals for your social media marketing is very important. What’s the purpose of your social activity? Let’s take a look at one of the most common social media goals, brand awareness. Below are some basic metrics you can track for the elusive goal of brand awareness.
- Brand mentions (social networks/relevant blogs)
- Social referral traffic
- Social engagement
- Social shares of content from your website
- Email subscriptions
- Blog subscriptions
- Content downloads
- Positive social reviews
- Inbound links
I would be remiss if I didn’t mention that your goals should be even more well-defined than simply building brand awareness. That’s a great overarching goal, but it’s even better to have more specific brand awareness goals. Maybe it’s increasing awareness of a specific product group or service category or increasing brand awareness through the consumption of your blog content. Having focused goals will help your narrow down the above list of metrics to 2 or 3 that are most important and meaningful to your business.
Annalisa Hilliard’s Answer From a Link Building & Local SEO Perspective:
In order to determine whether or not your SEO efforts are profitable, looking at certain metrics using a few different tools can be helpful. Let’s specifically look at on-page optimization. You should review the page in Google Analytics for the number of sessions, bounce rate and average time on page in addition to any metrics specific to your goals. Be sure to set a date range that allows you to see pre- and post-SEO implementation. If your business is seasonal, keep that in mind as you set the date range and analyze the metrics as it will likely impact the numbers. For example, sessions will likely be higher during your busy season.
It’s also a good idea to take a before and after snapshot of the keywords you’re targeting to see what page on your site is currently ranking for those keywords and in what position. For doing a quick check, I use SEO Book’s Rank Checker, but there are other tools like Moz Analytics – which gives you more capabilities to dissect the results and track keywords over time, all within a user-friendly dashboard.
Making connections between your online efforts and business’ profits can be less challenging if you use the available tools to track the results. Seeing your efforts and results side-by-side can provide insights that allow you to make adjustments accordingly. A word of caution though: If you make too many changes at once, it will be hard to pinpoint which changes were most effective, so keep in mind it’s a process. Furthermore, give your changes time to get traction. You won’t get results the day after you optimize a page. Usually, it takes a couple months to see progress, but that can also depend on other factors like the competitiveness of your industry and your overall web marketing efforts. On-page optimization is only one small piece of the pie.
Mike Fleming’s Answer From an Pay-Per-Click, Analytics and Conversions Perspective:
To get to the answer to this question, you need to do three things:
- Track micro and macro conversions. What are ALL of the actions that either increase revenue or decrease cost to the business that are happening online? Track those. Before investing a dime in marketing campaigns, do whatever you can to track those actions. If you’re only tracking the ultimate sales or lead goals on your website, you aren’t getting a clear picture of the value that your online efforts are bringing. Track everything.
- Assign economic value. How can you know if you’re profitable if you don’t know the value of the actions that are being completed? Whether it be the value of an online purchase or the average value of a lead (Yes, you should be calculating that!), you can only know if you’re profitable if you actually know the value of each result. Give value to everything possible.
- Apply attribution modeling. For some tracking applications (like Google Analytics), by default 100% of the value that an action brings is attributed (or credited) to the last campaign or channel to drive the user to the site. We know that’s suboptimal. If they first learned about you through a previous touch point, surely that deserves some of the value credit, right? But how much? There are different theories to this, but the fact is that every business is different. You can’t just apply a formula that other businesses are using. You have to get to know the buying process of your business and how your customers are driven to take those valuable actions. Then, you can move value around between touch points to more accurately reflect the actual influence each touch point has on your customers. Will you ever get this to be perfect? Probably not. But you’ll better be able to assign value to channels and campaigns to compare to their investment, which can affect where your money goes.
By doing this legwork and consistently monitoring your results, you can get a good overall picture of the profitably of your efforts.
Chris Steurer’s Answer From an Development Perspective:
There are a few situations for development where you need to consider and monitor profitability. The first (and most obvious) is when you are building your first website or an updated website. Other situations where you need to pay attention to profitability might involve adding new features to your website, updates, security enhancements, back-end functionality and other related tasks.
Let’s talk about building a new website or overhauling your current website first. This is a big decision to make, and one that shouldn’t be taken lightly, as your website is often your brand’s hub on the internet. To consider all the details about your profit and ROI on building a new website isn’t easy. There are many facets and caveats that come along with it. The big things to consider with a new website are the conversion rate increase you are expecting with the new website and the time you will save with a new more automated system.
Initially, most people really only consider the new conversion rate they are expecting to see on the new website. This is the money maker, right? While often times you will (eventually) see an increase in conversion and engagement on a newly created website, is this really the only profitability factor?
The profitability aspect of a new website that often gets overlooked is the productivity and workflow enhancements that it can provide. What if instead of taking a week to add new products one by one to your system, you could simply upload them all via a CSV file? What used to take a week now only takes a few hours. What if instead of sending out review emails manually to your customers, you could have those emails auto generated and mailed out for you?
The internet provides us with wonderful avenues for automation, and if you are not considering those in your new website build, you aren’t getting the full website that you deserve. When creating a new website, be sure to talk with the development team and let them know what things you need to do quickly, what things take you and your team a long time to accomplish, and what things you do that just feel redundant. This will give them insight into some of the workflow issues, and they can often present great solutions that you have never heard or thought of. If they don’t know it’s an issue for you, they won’t know to find a better solution for you.
BONUS LAP WITH: Bill Hartzer, Senior Strategist at Globe Runner SEO
Bill sure likes to keep himself busy. In addition to his role as Senior Strategist at the full service interactive agency Globe Runner SEO, he also runs his own strategic online marketing consultancy, Bill Hartzer, LLC, which provides services such as SEO, social media marketing and online reputation management. We are delighted that he took time out from these important roles to answer our Ask the Pit Crew question.
In order to really know if your online marketing efforts are profitable, you first need to get a really good handle on how much it really costs to provide your product or service. Once the real cost is known, tracking your online market efforts is critical. Let’s look at this more in depth.
First, let’s look at determining the cost of your product or service. If you’re selling a product online, not only should you calculate the price of the product that you pay (the wholesale price), but you need to include other costs, as well. For example, we include the cost of shipping, but what about employee costs, the cost of rent, electricity and other typical office expenses? All of that should be included in the calculation of how much it really costs to produce or sell the product. Certainly marketing costs should be included, as well. Are you marketing your products via PPC (Pay Per Click) and driving visitors to your website? Or are you paying an SEO firm a monthly retainer fee? Again, these are the actual costs of doing business online.
Tracking the success of your online marketing efforts is critical. Services such as Google Analytics allow you to track visits from a source (such as PPC or organic search) and follow a visitor through the entire buying process. It’s only when you combine the true costs of doing business online and with traffic and conversion data that you can calculate your true ROI and determine if your online marketing efforts are profitable.