The world of marketing is evolving fast and for senior marketers that means you need to either learn fast on the job, add resources or outsource parts of your marketing activity. If the latter is your preferred option, like many companies, you’re probably using an agency of some kind.
But is your agency delivering results?
From experience, marketers are expected to deliver against a set of Key Performance Indicators (KPI’s) to meet with the overall objectives of the organisation. But, more importantly for every £ spent on marketing you need to measure the “Return on Investment” (ROI). A good benchmark for a return ratio would be 3:1 (revenue to cost), anything over 5:1 would be considered strong for most businesses and 10:1 would be classed as outstanding. If your marketing efforts are returning lower than 3:1 you really need to review your marketing strategy.
While marketing budgets can be sizable for some companies, it can be restricted for others, but nonetheless your chosen agency should still be able to deliver tangible effective results against a budget provided that the marketing strategy adopted is correct for your business. As digital marketing matures and more companies shift from physical to digital, this opens the opportunity for businesses to establish their online footprint. However, this opens the door to greater competition which will ultimately impact upon cost.
Another issue that marketers face is choosing the right agency for different marketing elements eg web design, PPC, social, content or SEO. Many companies have multiple agencies handling different elements of the marketing mix, but this often presents problems. Unlike your in-house team, different agencies have different goals, agendas and you’ll often find that insights are rarely shared. This results in projects becoming siloed and disconnected from the ROI objective and disappointing results for the client such as low, ineffective site visits or poor audience targeting – this is a waste of a client’s marketing budget on activities that do not deliver adequate results.
The key takeaways for marketing managers are:-
1). Set your strategy objectives (ensure they are Specific, Measurable, Attainable, Relevant and Timely)
2). Know your return ratio. How do you do that? Simple:
Add up the total value of the return i.e. if you have an ecommerce site and have a turnover of £10,000 per month divide this by the total marketing outlay:
- Pay-per-click spend
- Display ad clicks
- Media spend
- Content production costs
- External email lists
- Outside marketing and advertising agency fees
Therefore, if my total marketing outlay is £2,000:
A great return and a well distributed marketing budget.
3) Above all start getting to know your numbers along with your objectives and hold your agency accountable to ensure they are delivering against them.
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