Understanding ROI at Every Step of the Funnel
by DJ Team, on May 5, 2020
In the world of creative writing, there’s a common phrase tossed around in workshops that might sound grim to an outsider: “Kill your darlings.” What this means is that even if there’s a word choice, a sentence, or a whole section that feels like the best you’ve ever written, one that’s perfectly composed and a total home run, if it’s not working for the benefit of the piece, then it’s time to cut it out completely. You might think it’s magic, but your readers just don’t get it.
This adage doesn’t just apply to writing. Marketing is another space that requires a critical eye for spotting what’s really working best, and not just what’s working the way you’re used to. This requires a proper understanding of marketing attribution at every level of the funnel. Without it, you may end up wasting time and money on marketing tactics that just don’t have the ROI you need.
How a Lack of Marketing Attribution Leads to a Loss of ROI
One of the most important aspects of any good marketing strategy is an understanding of which channels are serving the most good. Marketing ROI can be difficult to prove, especially if you’re limiting your use of marketing attribution models to just one or a few. It’s understandable, as the numerous different models available to marketers can make for a difficult decision. In fact, only 22% of marketers feel that they’re using the right attribution model. That’s why out-of-date strategies like first touch attribution or last touch attribution are still hanging around as the primary attribution model for some. Both of these approaches measure success based on a single point of the customer journey, either the first or last. These are a bit of a reductive way to judge your marketing efforts. It means that 100% of the credit for a conversion goes to one channel. However, in reality, measuring ROI in marketing is a much more complex thing.
What is last click attribution? Imagine you’re watching a soccer match. These games can have long scoring droughts, as both teams try to push the ball down the other’s side of the field. As you’re watching the game, you get distracted. You step outside to grab the mail, you grab a drink from the kitchen, and you start scrolling through social media on your phone. But, suddenly, the voice of the announcer lifts into untethered excitement, as you look up to see your squad’s star player fire a shot directly into the goal. With single touch attribution, all of the credit would go to the player who scored the goal or started the play. Never mind the numerous passes that were made, headers that kept the ball in play, or the set-up that was started by a defensive steal on the other end of the field.
When attribution doesn’t cover the full range of possible customer touchpoints, you end up celebrating only one influence, as opposed to a more holistic view of your entire strategy. So what is multi channel attribution? Let’s dive into the metrics that matter most at every stage of the funnel.
Measuring Top of Funnel ROI
Consumers just entering the marketing funnel are considered to be at the top. This is where your content is used to spread brand awareness. Content like blogs, videos, and infographics can help to take mildly interested consumers and turn them into bonafide leads. However, customers at this point are touching a lot of different contact points. Additionally, they’re pretty far away from an actual conversion. That doesn’t mean, though, that they should be ignored. In order to ensure you’re getting the most of your spend in marketing efforts, you need to know what’s working and what’s not for these broad interactions.
One of the most valuable metrics for evaluating top of funnel ROI is bounce rate for a particular page. This metric answers questions like, “How long are people sticking around for my content?” While this may be a fairly generalized way of looking at your marketing channel success, it’s still a great way to establish a baseline for your audience’s reaction to your materials.
According to Rocket Fuel, in 2019, the average bounce rate for top of the funnel content on websites fluctuated between 26%-70%, settling at a median rate of 49%. But without a wide marketing attribution model, there’s no real way to connect how these interactions on your site impact the overall conversion rate. It’s also worthwhile to keep track of things like finding out where your customers are going after they leave your page (exit pages), as well as which social media channels are bringing the most customers in. Again, a visit from a social media page is unlikely to be the only deciding factor in converting a lead.
If you’re relying on a last touch attribution model, it’s going to ignore the impact your social media or content had on the sale. The average online transaction has over 30 touchpoints associated with it. If you’re not accurately tracking this multitude of channels and content types, you’re failing already at measuring your marketing’s ROI.
Measuring Middle of Funnel ROI
The middle of the funnel is where we find a lot of email marketing. According to 99Firms, 90% of customers check their email every single day, which makes sense considering 80% of marketers feel that email marketing is the top dog when it comes to customer acquisition. However, anyone who’s ever gotten a cold-lead email from someone they don’t know is familiar with the feeling of saying, “I banish thee to my spam folder!” Well, maybe it’s not that dramatic. But regardless, measuring the success of middle of the funnel email marketing comes down to measuring elements like open rate, CTA clicks, and engagement with content consumers are sent to.
The average email open rate across all industries hovers around 21%. Though losing out to 79% of potential customers may seem like an abject failure, marketing is often about taking the good with the bad, and learning to see the silver lining in finding customers from a larger data set. Another important metric for measuring ROI is click through rate, which measures how many individuals clicked on a link in your email, thus sending them to another touchpoint in their online customer journey. According to Lyfe Marketing’s sample across industries, email marketing strategy had the highest ROI, garnering $44 for every $1 spent. However, without a decent attribution model, there’s a good chance you may end up missing out on the potential return of investing heavily in middle-funnel email marketing.
Measuring Bottom of the Funnel ROI
The bottom of a marketing funnel is all about final lead conversion. Here is where we see mild interest manifest into an actual sale, which may vary based on your business’ offerings or services. These might be defined by someone purchasing something through an eCommerce site, contacting a sales representative for a SaaS product, or driving someone into a brick and mortar store to take a look at an item for sale, like a car. But however you’re measuring these wins, marketing attribution allows you to get a clearer picture of what touchpoints actually pushed them over the goal line.
When things are going well, it’s easy to just assume that it’s just the entire marketing strategy that’s converting these consumers into customers. On the flip side, when sales numbers are dropping, it may be tempting to blame channels you don’t understand. This is the true cost of skipping out on competent marketing attribution. When you’re not able to accurately measure the benefits of each channel, of each level of the marketing funnel, it causes you to make improper decisions and eventually sink money into the wrong areas or cut funds from the ones producing the best leads. If you’re looking to maximize ROI at every step of your marketing strategy, one of the best ways forward is consulting multiple marketing attribution models.
DemandJump: Your Ultimate Source for Marketing Attribution Data
Are you struggling to understand what’s really driving your performance? With DemandJump’s platform, you’re provided with a plethora of metrics and data that can help you directly measure the ROI of your marketing efforts. You’re able to keep an eye on basic conversion tracking, path-to-purchase insights, as well as more specific marketing attribution modeling, conversion influence, and programmatic impression tracking. All of these elements help you to understand your ROI at every stage of the funnel. If you’re ready to take a deep look at your marketing plan, and understand which of your darlings are the right one to do away with, DemandJump has a 30-day free trial waiting for you. Contact us today to learn about getting started.