Many times I pity Don Draper. Not because of his amazing good looks, high-rolling lifestyle or his success with the ladies. Well, I do envy those things about him. While I may not be as handsome, or rich, or as ‘successful’ as he is, I have something he doesn’t – the ability to compare marketing channels with ease. 

Traditional Versus Digital Marketing Efforts

Traditional marketing efforts are historically, pretty hard to compare – how do you measure the impact of a billboard? Of a TV ad? Sure, you can estimate the amount of people driving by or the amount of people watching a TV program….but how do you measure the customers you gain from that? It’s almost impossible. With public displays and television/radio, it’s more about impressions then conversions. Digital marketing, on the other hand, is a whole other beast. While there’s no perfect version of analytics that can tell you every single detail – you’d go mad trying to get every detail sorted out – with some basic marketing dashboards and some 4th grade math, it’s pretty easy to figure out where your leads come from, the average value of a lead, the ROI and Cost Per Acquisition of your campaigns, and compare your digital marketing channels against one another to see which channels perform the best and which you need to adjust to reach your goals.

Finding Your Cost per Acquisition & ROI

You could write an entire novel about finding your cost-per-acquisition, and really, no method is going to be perfect when it comes to this – it’s an imperfect science. But we can get a really damn good estimate pretty quickly with some basic math and analytics knowledge. Let’s say you run a software company. You sell enterprise software and those cost-per-clicks are pretty high. The goal of your ads is to get someone to the page and get them to fill a contact form.

  • Total Click-Through: 2,000
  • Total Campaign Cost: $10,000 (includes ad spend + management)
  • Conversion Rate: 5%

With 2,000 clicks and a 5% conversion rate, you’re looking at 100 prospective customers, and your cost per acquisition for each customer is $100. Thing is, that’s the basic formula. That doesn’t tell you the whole story going on here, especially if you have a long sales cycle. Google Analytics doesn’t know your sales team or the details of your business. We can go one step further to get an even better picture of your ROI

  • Total Click-Through: 2,000
  • Total Campaign Cost: $10,000 (includes ad spend + management)
  • Conversion Rate: 5% of visitors download the product trial
  • Leads: 100 Sales Qualified Leads now in pipeline
  • Lead to Customer: Your sales team has a 25% close rate on this product.
  • Product Revenue: The software cost is $500

So if you have 100 leads, your sales team is closing 25% of deals and your product is $500, your estimated revenue generated by this campaign is $12,500, giving you a return on your paid search investment of 125%. You can get to this number quicker by setting a Goal Value in Google Analytics. Set each conversion to a goal value of $125 and boom, you have your estimated revenue at an instant across every channel. The math doesn’t change much for other forms of marketing. Here’s an SEO example with the same company:

  • Total Organic Visitors: 3,000
  • Total Campaign Cost: $5,000 (cost of your SEO campaign)
  • Conversion Rate: 3% of visitors on organic download the product trial
  • Leads: 90 Sales Qualified Leads now in pipeline
  • Lead to Customer: Your sales team has a 25% close rate on this product.
  • Product Revenue: The software cost is $500

Your sales team closes on about 23 of these 90 leads. Total revenue generated is $11,500, you spent $5,000 on SEO, and so your ROI on your SEO efforts is around 230% You can expand on this concept forever if you have the right analytics programs and best practices in place. You can estimate the ROI of anything, really, and know exactly where your money is going and what it’s doing for your company.

Organic Vs. Paid

Fortunately, cost per acquisition is easy to figure out for Paid Search – it’s a default metric available in most analytics programs. Organic CPA isn’t a default metric Google gives you, but it’s easy to add a note in a custom dashboard where you note the amount spent on SEO and do basic math to arrive at your CPA. We’ve also got total goals by medium and a breakdown of some important conversions based on each channel they come through.

PPC and SEO comparison

Organic vs. Social / Referral

Social media is a valuable traffic channel for many companies. Social media promotion tends to be less about generating direct conversions and more about engagement – getting visits to your website, getting people engaged with your company. In this example we’ve compared the top visited pages from organic vs. social, the total number of visits from each channel, and the top sources and time on site for each. As we can see, the pages that do well in organic are often not the ones that do well in social. Social tends to see much more love for our newer blog posts. We can also see Facebook brings us some awesome quality traffic that spends quite a good bit of time on our website, and those visits are much longer than their organic visit counterparts. We can also do the same as we did with paid and look at goal completions/conversions for each channel, and add enhanced metrics for cost of acquisition, assisted conversions, and more. Like we mentioned in our Customizing Dashboards post, there’s no limit to what we can build a report for – Facebook Ad Cost-Per-Acquisition? Sure thing. Just want LinkedIn data? We can filter it out.

organic traffic versus social referrals

E-mail vs. Organic

E-mail marketing has the capacity to be an incredibly effective channel, if with limited reach. In general, with e-mail marketing you’re focusing on leads / customers you’ve already captured, so the numbers are never going to be as high as organic. On the plus side, e-mail marketing is often very low in cost – it’s easy to run a basic e-mail campaign on $50/month using a service like Constant Contact. In this comparison, we see that while e-mail is limited and hasa low conversion rate, our CPA from e-mail is incredibly low. Organic is bringing in the bulk of our visits and conversions, but it’s an expensive engagement. A great option here might be to implement an inbound marketing plan to capture more e-mail leads and put them into a lead nurturing workflow.  

email versus organic comparison

Paid vs. Paid (In-Channel Comparisons)

Another dimension of digital marketing involves comparing within a channel – for example, comparing your Bing Ads campaigns to your Google AdWords campaigns. In this example we see that Google is not only bringing us more conversions (which it almost always will because of its larger userbase), but the cost per conversion is lower. Revenue is also increasing from Google and decreasing from Bing – might be a sign to shift more of your budget into Google rather than Bing. You can expand this concept with the use of custom filters – Facebook vs. Twitter, different organic campaigns; you can even pit e-mail campaigns against one another. Using this type of dashboard is great for fine-tuning your efforts on a certain channel.  

Paid search throwdown- google versus bing

Conclusion

A great marketing campaign – be it online or off – needs multiple channels to succeed. Relying on one tactic alone is not a good strategy for marketing – hell, it’s not a good strategy for life, really. But that doesn’t mean you can’t compare different areas to see what’s working best for you, find where you need to improve and adjust your strategy moving forward. If SEO has a high cost of acquisition but you’re getting good leads on the cheap with Google AdWords, it’s probably a good idea to move more resources into paid search and adjust your organic efforts to get more qualified traffic.

If you’re not getting any engagement on social media like Facebook, nobody is visiting the site from your post or interacting with your brand – well, why are you spending time on that? It’s time to adjust the strategy and try something new, or maybe social media isn’t for you and you need to take those resources and put them into e-mail marketing. Adjusting your strategy and where you allocate your time, effort and money is a critical component of both life and marketing – and while we don’t have a life dashboard for you yet, we have some awesome tools to help our clients compare their marketing channels and make sure they’re getting the best possible bang for the buck.

How Long Does SEO Take-Blog-CTA