If you’re managing digital marketing for a mission-driven brand, you’re responsible for proving the value of that marketing to your CFO and board. You may also be responsible for adding and cutting line items in your P&L, especially as it relates to your digital agencies.
When times get tough, these agencies are often the first to go, and digital marketing gets placed under more scrutiny than ever. The board is suddenly questioning why money is still going to social media and Google ads when it could be going into Amazon or retail sell-through, which both show more direct ROI.
Here’s the good news: digital marketing is more than just social media and Google ads. When done right, it’s the foundation of successful brand growth, both online and offline. So if you find yourself having to prove the value of your digital channels, here’s how to do it.
Take a Portfolio Approach to Measuring Your Marketing Performance:
You have “bottom-of-funnel” channels like email that convert highly interested prospects today. And you have “top-of-funnel” channels like Facebook ads that find your next highly interested prospect to convert down the road. Both are critical to building a healthy D2C channel for a brand, even if it looks like those top-of-funnel channels aren’t pulling their weight. They’re behind the scenes working toward overall strong profitability, and the blend of all channels together is what drives a positive net profit.
So how do you prove that all channels are valuable? By taking the portfolio approach. You’re going to have some losers, you’re going to have some winners, and overall, the result is a growing investment portfolio.
To put this into action, work with the finance team to determine the ROAS that is break-even. Factor in all costs – COGS, overhead, marketing budget. In our experience it’s usually, not always, around the 300% ROAS mark for brands selling direct to consumers.
Optimize your bottom of funnel channels to get at least a ROAS double your break-even
Optimize your middle of funnel channels to get around your break-even ROAS
Allow your top of funnel channels to get between a 50-100% ROAS (or better)
Adjust how much of your overall budget you invest in each area of the funnel so your overall ROAS comes in where you need it to, which usually depends on whether your brand is a start-up or well-established brand.
For more on the strategy behind the portfolio approach, check out our blog post on a healthy marketing mix.
Use It as a Tool to Reach New, Engaged Consumers:
If you’re like many of our partners, one of your 2020 strategic goals is to reach and convert new demographics such as a new type of consumer or a younger age group. And digital is the first place to reach them, especially if you’re going after the young crowd. We can’t say enough how fantastic Facebook and Instagram are for reaching those in the 18 – 34 demographic, especially when you’re highlighting your brand values and stories in your ads.
When measuring the success of your ads and proving the worth of this tactic to your team, we recommend focusing on the share metric. Having a viewer share the post on their timeline or with a specific friend is the virtual equivalent to a someone going shopping with that friend and saying, “Hey, let’s try out this brand, I’ve heard a lot of good things about it.” There’s also data in our ads analytics to suggest that a social share is strongly correlated to more meaningful action down the road such as website visits and purchases. As a marketer, what more could you ask for?
Prove that Digital Supports Offline Channels Too:
Speaking of shopping—digital marketing drives retail sell-through. If you’re launching new products in Target, or just want to drive more purchases of existing SKUs, you can create social media ads that target (no pun intended) the people who live nearby and are already interested in your brand or market to increase those folks’ foot traffic into the store.
You can also entice these viewers by offering a digital or printable coupon that they can use in-store, or by partnering with coupon apps like Ibotta that offer money back on specific purchases. This is also a great tactic to use to support a brand refresh that you’re rolling out across retail partners, and it will give you trackable purchases that you can then bring back and present to your team.
There’s even some awesome software that allows you to target people who are currently located in specific locations, such as—you got it—currently shopping at Target.
Unlock Bottom-Line Revenue:
If you haven’t already completed a full SEO audit and regular SEO maintenance for your site, now’s the time to do so. SEO is a major key to long-term profitability and needs to be prioritized as such. If you’re not dominating page 1 for your vertical and working to build your site’s authority, you’re missing free traffic from Google. And what CFO doesn’t love to hear the word ‘free’?
Use It To Stabilize Your Brand When Shopping Behavior Shifts:
If there’s anything that the last few weeks have taught us, it’s that consumer shopping behavior can shift in an instant. A successful brand knows not to place all their revenue eggs into the retail basket, because the nature of retail can change so quickly—consumers could switch to staying indoors, as we’ve seen with the coronavirus, or your partnerships with those retailers could change or even end. What is more stable is your own website that your brand owns, and the D2C channels you manage. The brands who maintain strong revenue growth are those who invest in their SEO, email growth and audiences, because it keeps their eCommerce stable during times of uncertainty and makes up for times that retail is not strong. Plus, you own those audiences—you don’t on Amazon.
To boil it all down, digital marketing is the foundation of a successful brand who wants to grow for the long-term. It’s how you’ll reach and convert new demographics, support your retail growth, increase your profitability for the long-term, and stabilize your brand during times of uncertainty. And to prove these values to your brand, you just need the right approach to your goals and your data.
Want us to do an audit of your digital marketing or dive further into any of these strategies? Schedule a complimentary, sales-pitch-free, 30-minute strategy session with us:
