As 2019 nears its end, business owners are ramping up their holiday marketing efforts and preparing for the sales tsunami that is sure to ensue. However, in all the hectic holiday hustle and bustle, retailers must also take time to establish their digital marketing budget for 2020.
During the last quarter of the year, marketing teams generate new strategies and tactics for reaching consumers. These blueprints act as a roadmap for engendering a seller’s vision for what is to be achieved. That said, a brand’s outlook must be rooted in sound reasoning that is derived from concrete data that will aid business owners in understanding how to most effectively get the company from Point A to Point B through its marketing initiatives.
Therefore, merchants must explore the forces that drove their conversions in 2019, including messaging, audience demographics and influential touchpoints that resulted in sales. To gain proper insights on such metrics and behaviors so as to craft an adequately prioritized digital marketing budget for the upcoming year, retailers must begin their analyzation efforts by looking at their traffic sources.
1. Establish profitable traffic sources.
Most websites receive traffic from a multitude of sources as consumers have an increasing number of channels through which they can access a site. Fortunately, retailers can utilize Google Analytics to establish how consumers arrived on specific pages. Some of the different traffic sources that sellers might see include:
For sellers to view their traffic sources for specific pages, start by logging into Google Analytics and going to “Behavior > Site Content.” From there, site owners can select if they would like to view traffic sources for all of the store’s pages, or specific ones like landing pages or exit pages. After selecting the desired pages, navigate to “Secondary Dimension > Acquisition > Source/Medium.” Doing this will display a list of the selected pages, alongside sources of traffic, such as where users were prior to clicking through to a specific page.
From here, merchants will want to create an advanced segment to gain a more comprehensive, detailed view of the traffic stats for specific pages. While the initial Google Analytics traffic breakdown is helpful, it only provides a collective overview of all traffic sources as they are relegated to buckets of direct, organic and referral traffic. By creating a segment, sellers can break traffic sources down to a more refined level, thereby gaining direct insights into visitors driven by paid search, social media and so forth.
By obtaining detailed information on which channels have successfully driven click-throughs, retailers procure an understanding on which portals are most influential for their brand, thereby guiding budgeting efforts. However, it is understandable that some retailers don’t have the time or acumen to sift through such data properly. In such an instance, it is advisable to partner with an e-commerce marketing agency to help extract actionable budgeting insights.
After establishing where traffic comes from, it is time for merchants to dig into who exactly is visiting their sites.
2. Uncover audience demographics.
The success of any marketing campaign rests on an intimate understanding of who comprises a brand’s audience as this informs the portals leveraged, messaging employed and nearly every other facet of the push. The fact is that without detailed and penetrating knowledge on audiences, marketing dollars are almost certainly being spent on uninterested, irrelevant consumers who will never convert.
Therefore, sellers must utilize the data at their disposal to uncover the exact demographics that drive business growth. However, before this information on the types of folks visiting a site can be accessed, sellers must enable the demographics and interests reports in Google Analytics.
Once this step is complete, merchants can access this user data:
To access this data, go to “Audience > Demographics” in Google Analytics. From there, the overview provides sellers with a broad breakdown of the demographics of site visitors. Navigating to the Age and Gender section of the Google Analytics accounts allows for more detailed information on site visitor behaviors as they relate to these dimensions. For example, from these pages, sellers can identify which age groups generate the most revenue or which gender initiates the lion’s share of new sessions.
Once again, it is advisable to create an advanced segment to break down the data into more minute details for further analyzation. Doing so is essential as establishing a brand’s most fervent audience segments is key to prioritizing marketing budgets in the year to come. However, it is not just people and portals that sellers should study, as it is equally vital to analyze the effectiveness of different tactics.
3. Contrast ROI for PPC and SEO campaigns.
Understanding exactly how much is spent on content marketing, search engine optimization strategies, display, and social advertising and email marketing, as well as how much revenue each methodology produced, is critical for scaling an e-commerce business. To effectively prioritize next year’s marketing budget, understanding the ROI of each activity is crucial. Thankfully, return on investment can be simple to calculate. This is one formula you can use:
ROI = (Gain – Cost) / Cost
That said, there are more complex marketing ROI formulas that retailers can use.
When calculating the cost, it is important to look beyond the campaign materials and include other factors, such as labor. Furthermore, gains can be defined in different ways. Some sellers might define gains as profits from a sale, while others might deem this as the long-term value of a customer.
For merchants to effectively understand the ROI produced by their paid advertising efforts, conversion tracking is necessary. Assuming that merchants already have this component in place, running a conversion report via Google Analytics will provide retailers with data on how many conversions came from paid search, organic search, social media and so forth.
On this page lives a tab that highlights the number of conversions, as well as the value. The value is essentially a metric on how much revenue has been generated from each channel. It is crucial for merchants to compare these values with the amount that has been spent in each arena (PPC, SEO, etc.) during the same time period to begin establishing the ROI for each effort.
For instance, if the revenue generated from organic search is $50,000 in a single month, and the company paid $10,000 on SEO efforts during that time (keyword research, content production, etc.), then the ROI would be $40,000 or 40%, roughly speaking.
This same process should be applied to email marketing, social media marketing and other marketing efforts to understand which tactics were the most fruitful for the business. By understanding which methodologies pulled in the most revenue for a brand, retailers can better understand where to invest their marketing dollars over the next year.
While it is crucial work for merchants to set their digital marketing budgets for the following year, it is also important to remember that things change. Therefore, over the course of the next 12 months, retailers should revisit, maintain and, if necessary, adjust categories accordingly as there are always unexpected costs and opportunities.
While marketing budgets for each brand are sure to look different, one thing remains the same: Setting priorities based on data is vital to maximizing marketing dollars to help a business grow. Analyze these areas of customer behavior and marketing performance to effectively determine how your brand’s digital marketing budget can be best spent in the new year.