Where Is Your Advertising Budget Going?

Most owners of small to medium-sized businesses have a good handle on all of their costs and expenses, with the exception of one major area. A dentist, for example, will likely be able to tell me how much revenue each of last week’s patients brought in, and how much he spent on labor, dental equipment and office supplies, but when I ask business owners what per cent return they are making from various marketing channels, the answer is usually, “I’m not exactly sure but we’re doing well so it must be all right.” Why are scrupulous and intelligent business owners who are diligent about every other aspect of their businesses willing to spend large sums of money each month on advertising with no mechanisms in place for tracking results?

The answer is that small businesses try to imitate big businesses. The type of advertising that most people are familiar with, and that most marketing books discuss, is advertising to change attitudes rather than to change behaviors. While this has proven to be incredibly successful for big businesses, it takes a lot of time, a lot of money, and requires repeated contact with consumers. The truth is that what is best for a big business is not necessarily best for small to medium-sized businesses, and can actually be quite harmful.

Small to medium-sized business owners should be able to know with certainty that every advertising dollar spent will return at least two dollars in profit. Moreover, they need to be able to track results campaign by campaign. Knowing only that, on the whole, a business’ advertising budget has a positive return on investment, but not knowing how each campaign is performing, makes business owners afraid to make changes lest they upset something that is working. Yet a closer look would reveal that most advertising campaigns getting an overall positive return on investment are made up of some profitable elements and some elements that are losing money. By eliminating the losing elements and scaling up the profitable ones, the return on the entire campaign can be driven up drastically.

Below are three easy-to-implement methods for tracking the profitability of advertising channels such as SEO or PPC.

  1. Conversion tracking: There are many software solutions available that can do conversion tracking, including Google Analytics, which is a free service. A conversion goal can be set up on any page of a website. Any visitor to that page would then count as a conversion for that conversion goal. For example, a home contractor may consider that a conversion happens when visitors submit their contact information in a “request a quote” form. Once the submit button is clicked, the user will be directed to a page that says, “Thank you for requesting a quote. One of our representatives will be in contact with you to schedule an appointment within two hours.” That thank you page serves two purposes. From a user perspective, it tells the visitor when to expect a call, and from a conversion tracking perspective, it tells the business owner that a visitor on the website has converted into a lead.

It is then easy to see what percentage of website visitors convert into leads. More importantly, tracking software can track the route by which each visitor arrives at the website, making it possible to compare the percentage of visitors that convert into leads based on the keywords in their search, which advertisements they clicked and which landing pages they saw.

  1. Call TrackingTo continue with the example of the roofing contractor, only some people will fill out a “request a quote” form and some people will pick up the phone and call directly. This is where call tracking comes in to play. Honestly, I’m surprised how few businesses are utilizing this service, considering how easy and inexpensive it is to implement. Phone numbers can be rented for as low as $1/month, so having even 10 phone numbers is a nominal expense. Every advertising campaign should use a different call tracking phone number. These can be used for offline or online advertising, and they make it possible to track exactly how many calls are generated from a specific advertising campaign.

Okay, so call tracking is great for offline media, but what about traffic sent to a website? Everyone sees the same website, so they’ll all be calling the same phone number regardless of the acquisition channel, right? Wrong! Every advertising channel or keyword group should send people to a custom landing page that is designed specifically for the customer segment being targeted. This will help not only with tracking, but with conversions as well. There are also dynamic call tracking services that replace a phone number field with a call tracking number site-wide and display a different phone number to website visitors that are acquired through different acquisition channels.

  1. Split TestingNo matter how profitable a campaign is, it is always possible to further optimize it. Internet advertising allows for extremely agile advertising. In the digital environment it’s easy to run five different advertisements on five different advertising channels, and test each across five different landing pages. Inevitably, certain combinations will perform better than others. Once identified, the poorly converting campaigns can be discontinued, the high-converting campaigns can be scaled, and new campaigns can be created to split test against the high-converting campaigns. The best advertising brains in the world can’t write perfect ads and create perfect landing pages on their first try. It’s impossible to perfectly predict how different segments of people will react to different offers. The important thing is to start with a few best guesses and then continually test to maximize each campaign’s return on investment.

If you can’t tell me exactly how much a lead from any given channel costs, and exactly what percentage of those leads will convert into customers, then you are essentially gambling with your advertising budget. By implementing tracking techniques, you will be able to identify exactly where you are making money and where you are wasting it and ensure that the overall return on investment from all advertising channels will go up month after month.


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The purpose of First Rank is to help businesses generate leads from their websites. We put a focus on SEO, because we believe it is one of the most cost effective and highest converting forms of traffic generation, however traffic alone is not enough on its own to grow your business. SEO should be combined with conversion optimization, email marketing and retargeting to maximize the ROI of your advertising dollars.