As usual, Seth Godin has it right - your marketing budget should be unlimited so long as the results are greater than the spend. This is especially true for online marketing.
Unfortunately, many marketers do not close the loop on their online marketing campaigns. By that I mean, they cannot directly quantify the results and know whether they are winning or losing.
I've found over and over that marketers don't close the loop on tracking and don't clearly know what constitutes success. Unfortunately, this is more often the case with bigger companies that spend more. Marketers should look at every online initiative they are running in 2009 and ask 2 basic questions:
- Am I able to directly tie acquisitions/revenue to each online campaign or segment?
- For each conversion or sale, what constitutes an acceptable cost per acquisition?
If you cannot answer yes to #1, make it a 1st quarter 2009 goal to get tracking in place such that you know the quantifiable results of each and every online campaign - email, search, online media, even web 2.0 channels. How? In email, for instance, each link in the message needs to have tracking code that will register actions either on an aggregate or individual level. Search campaigns, like AdWords, are even easier to track. Free tools are available through Google Analytics to track most any online campaign. For high end conversion and online behavioral tracking there are a handful of players: Coremetrics, Omniture and Webtrends.
Question #2 is can cause marketers headaches, an indication that it's a vital concern. Especially in retail, the acceptable cost per acquisition varies by product and even changes based on a customer's RFM and lifetime value profile. But if we're talking about revenue, at the end of the day, did the campaign create more revenue than you spent creating and deploying it? That's a start from which you can get as analytical as you'll allow statisticians to go - but don't over think it either. In any case, you can't afford not to know what constitutes winning or losing.
What challenges face your 2009 marketing spend? Could you address them better if you knew what every online campaign broght in and whether that constituted profit or loss?
