SMEs might have got the message about digital marketing, but few actually know whether their efforts are paying off, with a new Yellow Pages survey showing 69% of SMEs don’t measure the return on investment of their online advertising expenditure.
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The survey of 1,800 business owners showed more than three quarters of SMEs don’t have a digital business strategy guiding their investment, and just 10% make decisions on where to advertise based on the ROI delivered.
The report also reveals 30% of SMEs make decisions about where to advertise by asking customers how they found them rather than using call tracking or online analytic tools.
The survey found the most common reasons for not tracking ROI is because business owners are not entirely how to, as well as finding it too time consuming.
Michelle Sherwood, Yellow Pages general manager of marketing, says it is crucial SMEs find the time and resources to develop an effective digital strategy based on ROI.
“For SMEs, making the right decisions about where to advertise and how to find more customers requires a clear view of how the different elements of their advertising are contributing to the bottom line,” she says.
“This is why measuring and reporting return on investment is so important.”
Chris Thomas, managing director of search engine marketing and optimisation company Reseo, says many SMEs fail to make time for ROI because they’re too focused on selling.
“A lot of people are chasing the next sale and there’s not a big mentality around, how can I monitor and cut costs?” he says.
“I think sometimes people are drawn to the bright lights of online because they’re told that it’s accountable and measurable, but it isn’t if you don’t put the right tracking and the right processes in place to monitor everything.”
“It’s not until later that they start looking at their expenditure in say, AdWords, and they get a big bill and then they don’t have any visibility around, how much do we actually earn from that channel?”
Reseo’s top tips for measuring ROI:
- Configure your analytics properly to set up all tracking on your website, regardless of whether you’re an eCommerce or a service-based business. “You simply have to have goals configured up,” Thomas says.
- Actively track and monitor every channel that you’re advertising in or participating in.
- Assess the value of each lead, each product in terms of marketing dollars spent and start calculating your ROI from those metrics.
“From the ground up, it’s [about] laying the foundations with analytics, it’s [about] tracking and monitoring everything – wherever you participate – and each channel needs to be accountable,” Thomas says.
“Once you’ve got all that in place then you can start to tweak and refine everything in terms of what these things are worth.