Online advertising has become a standard tool for marketers. There are more studies and theories than you could possibly get to. There are also many sources of real intelligence on how to make digital ads work.
 

According to Mckinsey consulting firm, "the operational infrastructure required to make it work effectively (such as an agile IT architecture, automated processes, integrated business and IT capabilities) is painfully behind." They say that's true even for the most active online advertisers in the world. There are three reasons:

1) Digital spending is fragmented among different parts of a single company and there is often a lack of coordination between traditional marketers and their digital brethren.

2) Although digital is supposed to offer more information to marketers for better decision making, results are often lumped together in ways that muddy what could be learned.

3) Digital is also fractured among agencies, so one group handles SEO, another manages paid search campaigns, a third might handle some types of display ads, and then there are the companies that do automated programmatic buying. It's tough to get unified strategy and reporting.

McKinsey says that it has found five steps companies can take to improve how digital advertising works and to improve the returns it offers a business.

 

Kill averages

One of the most effective ways to muddy an examination of how something performs is to only look at averages. Top performers can keep average results high enough that you don't realize how badly poor performance can be. Don't settle only for macro views of digital marketing. If you use keyword-based ads or display ads, use all the data available to see where you're wasting money on tactics that don't pay off.

 

Relate decisions to profits

There are so many ways to measure digital performance that marketers can go crazy. They might look at the number of orders or cost per order. But it's the wrong place to look. This type of digital advertising is similar to direct marketing. You want to know the impact on profitability, the gross margins of orders, or, better yet, the lifetime value of customers. When you see the different impacts on profits, you can better determine which campaigns are a waste of time and which give you a bigger return on your investment.

 

Connect online and offline

It may be difficult, but find a way--statistical modeling and survey data are two examples--to calculate what effect online marketing has on the rest of your business. Unless you know the part digital plays in influencing a customer's purchasing process, you might underestimate how important the various channels are to you.

 

Create a single tracking system

Working with different agencies gets tough when each has its own set of metrics and you're trying to understand how rates and what you get for them compare. Put a uniform cost model and tracking system in place so you can make intelligent comparisons across what different publishers, ad networks, and agencies offer.

 

Focus on owned and earned media

In the race to make use of Facebook, Twitter, and other platforms, many companies use paid placements, tweets, and what have you to improve marketing returns. But your own digital properties, like websites, and coverage you gain, whether from news organizations or blogs, can produce higher returns on investment and more effectively foster relationships with prospects and customers.

 

Source: Mckinsey.com

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