An often-quoted rule in marketing is that you can’t spend your way to success. You have to spend your way by playing smart. That means not just playing by the rules but taking the time to get to know them inside and out. In today’s world, the rulebook involves knowing your data and following formulas, not assumptions.
At Ezzey, we regularly see how detrimental working from assumptions can be. For instance, one company we worked with thought that because its Facebook ads were successful, it could merely transition the same principles and investment dollars into YouTube ads to get the same digital marketing ROI. However, it didn’t do its homework on the different platforms or take the time to dive into relevant data. As a result, YouTube didn’t work, the campaign flopped, and the company didn’t understand why.
Let’s look at another assumption: Just because a business gets a 10-times return on ad spend (ROAS) in offline media doesn’t mean the same ratio will apply in online media. This is a big misconception and causes plenty of financial waste and headaches. Digital media advertising isn’t a one-to-one, linear beast. Rather, it requires you to use historical data to set expectations and validate hypotheses. Only then can you create a replicable model for your business to experience true digital marketing efficiency.
Constructing an Efficient Marketing Investment Strategy
Efficiency is a game changer in the digital marketing world. When you’re working efficiently, you can play the long game and gain massive competitive advantages. However, you have to know what efficiency looks like first.
For instance, efficiency involves maximizing your ad budget for long-term customer lifetime value (LTV). The bigger your LTV, the more money you’ll make over time. Would you rather get a ROAS of 10 times but only generate a one-time customer? Or would you rather get a ROAS of 5 times and enjoy 10-month average customer retention on a subscription? Although the first scenario’s ROAS is higher, it doesn’t position your company as well as the second scenario.
Want to see another instance of how efficiency can help you? Start by doing a deep dive into pay-per-click (PPC) marketing. Right now, if you’re making more money with a high click-through rate, Google will drop your PPC costs. As such, not everybody pays the same price. Consequently, if you can use your data to drive up efficiencies, you’ll also drive up your click-through rates and get more for your dollar as a reward.
Most marketers and business leaders aren’t accustomed to thinking about digital marketing efficiency in this way. They’re used to reaching for the biggest slice of pie possible. Yet in digital marketing, it’s not the size of the slice that’s important — it’s the size of the pie. A 50% slice of a tiny pie might not be worth as much as a 10% slice of a massive pie. Consequently, it’s important to work with a digital marketing team that can help you navigate this type of mind shift and invest your budget wisely.
Tips for Increasing the Efficiency of Your Marketing Dollars
At Ezzey, we’re unwavering in our determination to teach clients how to use data to improve their overall marketing efficiency ratio figures. If you’re tired of making marketing choices based on (potentially flawed) assumptions, you can begin to drive more efficiency by taking the following steps.
1. Play by the rules, make Google money, and believe your data.
Don’t think you can trick a platform like Google or a target user. You’ll almost always lose. The way to provide real value is to look objectively at your data. And make sure you’re willing to pivot if your marketing efficiencies aren’t working.
That last part is harder than you might think. One company didn’t understand its business model and gave away free shipping on certain products because they were selling like hotcakes. The problem was that the company didn’t factor in the return costs of shipping — and it was seeing tons of returns. When the client factored in the cost of all those returns, it turned out the company was losing around $100, on average, per product sold.
From the outside looking in, it’s easy to see that what looked like a high ROI in digital marketing wasn’t. Nevertheless, the company was stuck believing its assumptions instead of the data.
2. Have a trustworthy, working, and transparent data dashboard.
Hopefully, you’re sold on the importance of data. We certainly are. But you need a data dashboard you can trust before you can learn from your data. Your data dashboard must source data from places that aren’t corruptible. The cleaner your data is, the easier it will be to work with.
You should be putting your faith in objective — not subjective — data. Otherwise, you can go down an inefficient path very quickly. For instance, take sales lead quality. If you’re grading sales lead quality on somebody’s opinion rather than using raw numbers, you can run into problems. Of course, you can base algorithms on subjective data; you just won’t get successful or efficient results.
Ready for the Next Step?
Unless you’re 100% sure that the marketing patterns you’re seeing right now are the best you can do, you need to start exploring something different. At Ezzey, we recommend that you find out from the experts how to use your data to validate your assumptions and scale up efficiently. After all, what got you “here” typically won’t get you “there.” You need a fresh process that’s statistically and objectively likely to increase your profitability.
Want to discover Ezzey’s data and AI-driven process for efficient digital marketing? Contact us to set up a conversation about boosting your ROI in digital marketing.