For any business, but particularly an online retailer such as ourselves, advertising is integral in exposing your products to customers. And as digital continues to change and shape our lives and the world we live in, we have begun to re-evaluate our own advertising strategy at Christopher Ward this month.
We have engaged in digital advertising since our inception in 2004, but our emphasis to date has fallen more on print – which accounts for 80-85 per cent of our advertising focus. Our digital engagement has still been significant, and has included pay-per-click advertising, SEO, display advertising, engaging in online forums and blogs and social media advertising.
Regardless of the type of advertising strategy that you are engaging with, there are three KPIs that any online retail brand’s advertising should revolve around.
The first is the amount of traffic you are driving to your site. Secondly, measuring your conversion rate – what percentage of the people visiting your site go on to spend money? And thirdly, what is the average order of value of those who do spend?
What you want from an advertising strategy is to achieve the first two points: to drive traffic and to see hard conversions – sales. While it is hard sales that any brand wants, soft conversions – introducing new audiences to your brand – also play an important role in exposing consumers to your products and wider vision.
As the world becomes ever-more digitised it can be easy to be sucked in by the notion that digital advertising is the be-all and end-all, but I would advise caution against this. A huge amount of money is wasted on digital advertising agencies which over-promise what will be delivered and then offer vagaries when asked to provide the analytics to drill down into the impact.
In the last decade in particular, these agencies have benefitted from the fact that many senior people at companies have generally been older, and while experienced in business, they have not always been fully digitally savvy.
On the surface, one seemingly obvious benefit of a digital advertising strategy is the ease with which, contrary to print, its impact can be tracked. But dig beneath the surface and this is not so clear cut. You simply can’t quantify exactly how many people are searching for your site off the back of online exposure – just because digital agencies might claim that all the engagement with your brand is a consequence of their work doesn’t mean that this is necessarily the case.
As a small business like ours, you need a dashboard or sophisticated analytics to specifically show the traffic and hard conversions from your digital advertising. This puts you in a better position to judge the value of what you are getting.
One simple tip about measuring the true ROI of a digital advertising strategy is to strip away brand term induced conversions from the data. Remarkably, very few brands do this and therefore the ROI results on ROI include conversions that have obviously been driven by advertising other than digital. In our experience, this single action will at least halve the ROI – which can be a pretty sobering experience for all concerned parties.
On the other hand, with the inexorable decline of communication being absorbed by consumers in print and commensurate increase in digital, we may be at some sort of tipping point in terms of digital advertising – particularly through social media, which pushes the online advertising participation much higher than previously.
Of course, the print advertising strategy isn’t dead and will continue to be an important part of our mix. And with page rates more negotiable than ever because of the market shrinking, it is also possible to make this aspect of our advertising more profitable with good negotiation.
As with all aspects of running a business, if you can’t measure it, you can’t manage it. Never was this more true than with marketing spend and this month we have been thankful that our rigour in measuring our online advertising performance has given us valid insights into what the future spend should look like. At least that’s the theory!