Measuring ROI of Digital Marketing – Panel at the Digital Summit
When we conducted our Indian Industry Digital Marketing Survey we found that many brands were facing challenges in measuring the return that their digital marketing and social media marketing efforts were giving. Hence, we included an eclectic panel discussion on “Measuring ROI of Digital Marketing” at our Digital Leadership Summit.
We had four panelists moderated by Suneil from Social Beat: Mr. Vijay Anand – Sulekha.com, Mr. Arasu Shankar – Eshakti.com, Ms. Lavanya Hariharan – Zapluk and Mr. Shriram Sanjeevi – Oyethere.com.
Summary of the Panel Discussion
- Channels that provide higher ROI will depend on product and customer segment
- Google & Facebook continue to dominate as primary digital channels for most businesses
- For products/services wherein search volume is lower – then social would be a better channel to start with
- Facebook, Instagram & Pinterest allow for better product showcase and for visual products these would be interesting channels
- Building the brand and social trust is important for long term ROI and can be achieved through a mix of social media channels
- Influencer marketing is a very strong channel for ROI and also gets higher trust from consumers
- Instagram, Snapchat, Emailers are other ways to build ROI depending on the business.
- Life Time Value (LTV) is an important metric as marketing spend cannot be attributed to just the first transaction
- Tools like Google Analytics & Improvely can help in measuring ROI
Perspective on ROI from the Panelists
Suneil started off by asking the audience as to how many of them believed you could get ROI from digital marketing; it was a pleasant surprise to see that over 60% of the audience believed it could. We as a digital agency couldn’t agree more. The panel started with a discussion on what each of them feels about the results from digital marketing. We also have had a Digital Chai Pe Charcha on ROI of Digital Marketing, and you can read it here.
- Lavanya from Zapluk highlighted that they got a lot of organic growth once they started using the digital medium and in fact got 80% increase in customer base in just a month. As she rightly pointed out, it was a combination of brand building and lead generation activities.
- Vijay from Sulekha.com candidly shared that they were one of the highest spenders in the city on Google and that digital is critical to their survival. He shared that Sulekha gets around 250 million visitors via organic search and another 20-30 million via paid search in a year, and it’s their strongest channel for new user acquisition.
- Arasu from eShakti highlighted that the only channel they use is digital along with a bit of PR but not much offline marketing. They do get sales via SEO and referrals, but the growth of new customers is driven by digital advertising and marketing. They keep trying new features and functionalities on advertising channels like Facebook, allowing higher ROI. Over time, like Carat Lane they have built their digital score card on what matters to them – measuring and analytics are clearer now.
- Shriram from OyeThere.com said they use a 360-degree approach with a mix of digital and offline marketing based on his two decades of retail experience. He rightly pointed out that it’s a myth that digital gives immediate returns. Startups need to focus on building a brand, building the consumer trust and scaling up the service – then results come over time.
Which digital channels are scaleable and to what extent?
The entire panel did agree that the choice of the channel varies with the services/products and the consumer segment. It’s also very important to be smart as you scale adverting, as Arasu pointed out. It’s essential to be clear on what is the message you want to give about your brand.
Vijay continued to be a strong propagator of Google Organic and Google Adwords and said it’s the most scalable as SEO efforts now start showing results in a few days, for existing/older sites. Since they focus on services with low engagement from end consumers they, tend to focus less on social media channels. They did spend 15 crores on their TVC campaign earlier this year it only gives 5000 incremental visitors a day which is minuscule for them as they get about 6-7 lakh visitors a day. Vijay added that for brand building to show results, you need to be at it all the time.
On the other hand, Lavanya, Arasu & Shriram all spoke on how social media and in specific Facebook Marketing has worked extremely well for their businesses to get scaleable results. Lavanya highlighted that for a service wherein the consumer still doesn’t know it exists, the search volume on Google is extremely low hence Facebook & Twitter were the driving growth as they were able to achieve leads along with building the brand and engagement around it.
Arasu & Lavanya also touched upon the importance of building the trust factor with consumers regarding answering their questions and doubts and also in terms of showcasing the products/service in a more holistic way. As Arasu rightly pointed out that Facebook allows for better product showcase via the carousel ads, videos, etc. Even brand awareness and the brand story is better executed via channels like Facebook and Instagram. Talking about the social trust that’s built out, Arasu added that they now see existing customers answering queries raised by potential clients and that it’s a game changer for them.
Shriram added that the approach they take depends on the message, the channel also changes. For example, when they ran a huge campaign around Kabali by selling t-shirts, giving away movie tickets and more; Facebook worked very well for that as it’s a mass channel.
Influencer Marketing & Platforms other than Google & Facebook
We couldn’t agree more with Arasu when he said that “Channel will depend on product and customer segment.” For example, if you are looking to target millennials then Snapchat would be an ideal platform. If your product or service is visual and you are targeting a sub 40-year-old audience, then Instagram would be an excellent channel but there is indeed a demographic difference across channels. eShakti also focusses a lot on Pinterest as it’s relevant to many a fashion brand.
Emailer Marketing still works if it’s with your own audience. Vijay of Sulekha spoke about how emailer marketing is an important channel and delivers results when done smartly with smart targeting, in spite of Gmail pushing a lot of emails to the Promotions tab. Of course, once a user is acquired it’s up to the brand to retain them and emailers is a great way to do that.
Influencer Marketing was another channel that works very well and eShakti uses it extensively. Arasu shared that they work with 1000s of bloggers and they have built their network over a period. They calculate the ROI of influencers via direct referral traffic as well as transactions driven by the unique referral code given to each influencer. He also gave an interesting insight that there is higher trust from a consumer that comes via an influencer, so the 5-10% off that they give is covered up there.
There was an interesting question from the audience – Dr. Manoj from Dr. Smilez Group of Dental Centers asked about how they got very low engagement low on social as customers were not very keen on sharing their dental experiences. Lavanya shared her similar experiences as not a lot of women would like to share they got a beauty service or a wax treatment as it’s a personal service. The way Zapluk approaches it is to given them an offer or incentive but in the long run, content marketing is the key. Shriram added saying that ROI cannot always be attributed to direct sales – brand building and marketing is also to be measured
Importance of Life Time Value (LTV) of the Customer in calculating ROI
Everyone on the panel agreed that the return on marketing spend is not immediate; hence Life Time Value is an important metric to help scale up business and understand whether it’s moving towards profitability.
The LTV depends on different businesses, and we got varied perspective from the panel. Arasu spoke about phenomenal ROI wherein it just takes them 1.2 transactions to recover marketing cost as they have high-value transactions and very high repeat purchase. For Zapluk and Pamperazi it was three transactions to get the back marketing cost. Whereas for a brand like Sulekha, the end consumer was not paying anything, so it’s difficult to ascertain LTV.
Arasu mentioned that they look at the time taken to recover the marketing cost of acquiring the customer and for them, it’s usually the first 1-2 months whereas it is 3-4 months for Zapluk. Key metrics remain around customer acquisition, retention and finally on how to make them spend more and more often. It of courses varies by cohort, seasonality’s (for example, summer is a strong season for eshakti), types of customers, depends on the marketing channel and the marketing campaign that you run.
Shriram again had a very different perspective and said that “The word LTV is over done. Companies that boasted of High LTvs have shut down in the last couple of months because LTV was more of a myth.” He gave an example of Chennai’s leading retail chain Viveks wherein in many cases three generations have been shopping there and apparently they are also grappling with LTV. He also questioned how come Flipkart only had 32% growth in spite of the perceivable high LTV.
Tools to Calculate ROI
One of the participants had a very relevant question – Sejal from Zoho asked what are the tools use for calculating ROI. In most cases, Google Analytics along with data from Google Adwords, FB Ads, Instagram Analytics and other social media analytics tools would suffice. Suneil added that Improvely could be a great tool to understand muti-touch attribution as consumers often interact with the brand multiple times before the sale is closed. This tool allows you to see the history of the person and how they interacted with your brand. Read more about Improvely and other similar analytics tools here.
Suneil also added that there is sometimes a time lag between generating a lead to sale and ROI can be improved if you can figure out how to leverage that time frame to communicate about the brand and the offerings.
Vijay spoke about Google Analytics Premium (GAP) which is more relevant for larger organisations as its costs around USD 90,000 a year. He talked about Google Analytics data being heavily sampled; wherein GAP has unsampled data which can also be downloaded. GAP has only around 15 clients in India but Vijay recommends it’s to e-commerce and digital businesses as repeat customers are harder to track in free analytics tools and attribution is not always clear.