CMO’s Guide: Practical Tips for Digital Media Optimization
We all know that marketers increasingly continue to shift their spend towards digital channels. TV is no longer #1 in ad spend. TV captured roughly $71.3 billion in domestic revenues in 2016, according to eMarketer, just under digital advertising’s $72.5 billion in the IAB’s digital ad revenue report. One of the beauties of the digital media is that pretty much everything is measurable. A tremendous amount of data gets generated as users engage with the ads and travel through the purchase funnel. Thanks to data science, more data means more optimization opportunities for marketers.
There are many smart things marketers can do to optimize their digital spend to achieve better outcomes. I will focus on practical tips that can generate quick wins and measurable return for marketers.
1. Optimize your conversion funnel:
In our experience, this is an area that does not get the attention it deserves in the digital media optimization process. Majority of the effort and energy gets spent on campaign optimization. Conversion Rate (CR) is a big driver of revenue and profitability, and we recommend creating a detailed funnel chart breaking down the different components of the funnel and determining where you are losing big chunks of conversions.
Creating the funnel analysis by platform (mobile vs. desktop) and source (organic vs. paid channels) will help you identify specific areas of opportunity. For example, one of the things you should pay attention to is the amount of time it takes to complete the purchase funnel on mobile devices. By simplifying address and credit card entry, you can speed up the check-out process and increase the conversion rate. Landing page optimization will also provide opportunities for increasing CR by landing the visitors on an optimized page that engages them and leads them down the conversion path.
2. Integrate profitability and customer value metrics into your KPI set:
A large number of marketers still measure performance by looking at cost per click (CPC)and cost per transaction (CPT). These metrics are obviously important and need be monitored constantly. But to get the full picture, you should also integrate profitability metrics such as PpT (Profit per Transaction) or Pp1K (Profit per $1000 spent) into your measurement framework. This can provide visibility into the areas that will help you maximize profitability and ROI for the digital media spend. For example, spending in home electronics category could look very attractive for an online retailer based on revenue metrics but looking at results through profitability lens could prioritize non-electronic categories like home decoration higher given the major margin advantages. You can get started with one channel such as search program and expand it to include other media such as programmatic display and social. This will allow you to justify larger investment in the digital programs especially in areas where the profitability metrics are high and also will make the ROI conversation with your CFO more enjoyable.
3. Segment your visitors using granular data:
A lot of companies measure digital performance at macro level without fully understanding the impact of frequency and recency at the granular level. By using the click stream data in your Data Management Platform (DMP) or your web analytics tool, you can begin to segment your visitors by source, visit frequency and recency and determine high value visitors who drive the majority of conversions and revenue. This type of granular segmentation analysis will also provide insights into the timing and frequency of impressions you should be using to maximize the performance of your campaigns.
Some of these points may sound basic but many companies leave revenue and profits on the table because these basic pieces are missing. These tips will help you establish quick wins in your digital program and achieve better outcomes.
Ozgur Dogan is the Chief Solution Officer of C2G Partners.