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.

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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.
  • 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.

How Digital drove success of Carat Lane – Digital Leadership Summit

Below is the gist of the talk given by Mithun Sacheti on “How Digital drove the success of Carat Lane” at the Digital Leadership Summit in Chennai in August 2016.

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Key Highlights from his talk include:

  • Discovery is going to be driven by digital, consumption will remain omnichannel depending on the product/service
  • Consumers often make the decision online, but still, like to see the product in high-value purchases
  • Omni-channel is the approach towards profitability and Carat Lane has seen that with their Delhi centre, which contributes to 38% revenue and is a profitable city for them.
  • Extremely data driven approach with 4000 data points being tracked every month
  • Even spends on TV are tracked diligently
  • Key metrics to track: Cost per lead, Cost per conversion and Cost per visitor/traffic
  • Early days for digital transformation with more to see in the coming years

Mithun started off by highlighting that Chennai as the choice for Carat Lane did not come from the fact that he was based here but based on research that Chennai has the fastest clearing airport in the country. He goes on to talk about how opening the first Jaipur Gems store was challenging. Their biggest learning over the initial years was getting a clear understanding of the top/key customers since they used to get only about three walk-ins a day when they started out. They soon realized that making customers discover the store and new products is key. So when they opened their next store in Coimbatore, they were able to combine their learnings to ensure that 500 key customers walked into the store just on day 1.

How did they get into e-commerce?

They realised that discovery of products is a problem because of the limited walk-ins in retail as well as the limited scope to discover products before walking into the store. E-Commerce fundamentally changes the discovery process.

Today consumers make a choice before entering the retail store – the decision is usually made online. This is why global e-commerce started with books so that the discovery & shopping can happen online. For other products discovery is still lead by digital, but consumption is happening across e-commerce, offline retail, kiosks, etc.

In 2011, Carat Lane opened its first retail store – but they got it wrong in many ways. Firstly, they did not put much jewellery over there, though in hindsight they understood that consumers come in to try out the product. In Mithun’s words “We assumed customers were as obsessed with technology, as we were”. This changed when they opened their future stores. Moreover, their Perfect Look app allows you try out jewellery real time, and this was a big hit amongst consumers.

Why do consumers have distrust amongst e-commerce companies?

Mithun highlights on e-commerce evolution in India and candidly pointed out that between 2000 to 2009 there were early adopters who did not focus on last mile delivery and consumer experience – players like Indiatimes, Rediff, infibeam. This mostly led to distrust from consumers because they went through such bad experiences from these brands. This, of course, changed when the new age e-commerce companies started, including Carat Lane in 2008.

Is ROI real in E-Commerce?

Mithun was candid in saying that “Understanding of ROI was missing when we started, but we understood it the right way.”

In 2012 when the company evaluated its results, it realized that cost of acquisition was so high; it would take three transactions to make the customer profitable but an Indian consumer shop for jewellery twice a year so there was something wrong in the approach.

Their retail stores were a game changer because the process of discovery started falling in place. Consumers now started coming to the store with the product photograph wanting to try the product. It became evident that conversions will happen where they have an omnichannel presence. Two years ago they opened six stores in Delhi and now 38% of their revenue comes from Delhi and is the only profitable city of operation at the moment.

Is it an analytics business or a jewellery business?

Carat Lane is an extremely metric driven business, as Mithun pointed out. They track 4000 data points every month, but the critical ones are

  1. Cost per lead
  2. Cost per conversion
  3. Cost per visitor/traffic

Mithun aptly put it “There is never too little data”. Data helps bring clarity, and while it took Carat Lane 6 years to figure it out, it finally made sense. In the early days, the cost of consumer acquisition was never in focus. You need to know how much you are willing to pay for each of the above actions, as the business profitability depends on that. Each company needs to create its own attribution model – based on customer type. Google Analytics is a good starting point.

Mithun spoke at length about the advanced analysis that is done on TV ad spends. They used tools to find out in which tv program & which ad break & which ad slot had the highest visitors and highest brand search of Carat Lane. As per Mithun, searches & traffic ultimately reflect in conversions & sales assuming you have a great product + great UX. Of course, it’s not a perfect model. You can have assumptions and capture the ROI, in case there are two ads at the same time

On Startups, Funding & more

Speaking on how they used the funding they got, Mithun admits “Money is like oxygen, the human body is like iron – money can corrupt you”. They have learnt it the hard way and now moving towards profitability with a data-driven approach.

Talking about his investor, Lee Fixel, he mentioned an interesting quote. Apparently, Lee said, “My Fund has ten lives. You as an entrepreneur has 2-3 lives. Carat Lane has one life. If you think omnichannel is the right approach, then let’s do it.”

On closing. Mithun said that Digital would own discovery and budgets will move digital – which was also reflected in the Social Beat Industry Report. We, of course, agree when he said that India would be driving the digital transformation and even today with the worst internet bandwidth ever we have achieved this much – it’s only up to our imagination what the future holds!

Digital Chai Pe Charcha – Secret to a successful Influencer Campaign

The sixth edition of the Digital Chai Pe Charcha was held at our office on 27th August 2016. It received an excellent response with about 15 participants including entrepreneurs, professionals, digital marketers and social media influencers taking an active part. The topic of discussion was the secret to a successful Influencer marketing campaign.

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Here’s a quick summary of the key takeaways from the session:

What is Influencer Marketing?

  • Word of Mouth – Digitally
  • Brand Ambassador
  • Key/Celebrity Influencers, Social Influencers and Peer Influencers

Word-of-mouth advertising has always been the most powerful tool, and influencer marketing is WOM Advertising 2.0.  In simple terms, it means shaping the opinions about your brand using the most influential people amidst your potential customers. If you are a brand, you make friends with the most influential people at a place where you want to sell. Now, they talk about your brand and recommend you to their followers (potential customers).

Why use Influencer marketing?

The main reason that brands are looking at influencer marketing are:

  • Ad Blockers
  • Neutral + Engaging – Not an Ad
  • SEO + Organic Growth

Given that word of mouth, marketing generates more sales than paid advertising; more brands are beginning to think about influencer marketing as part of their branding strategy. In the last 12-16 months, we have seen many interesting influencer marketing campaigns in India run by the likes of Cadbury, Allen Solly, Ford & much more.

How to identify right influencer?

For any influencer campaign, selecting the right influencer and partnering with them is crucial. Checking the influencer’s reach is the first thing you would need to do. This can be measured in terms of the number of followers/fans or the number of visitors to their blog/posts. Always remember to choose quality over quantity.

The following are the parameters you should be using while choosing the right influencer.

  • Moz Domain Authority– This is a score developed by Moz that predicts how well a website will rank on search engines.
  • Reach in Social channels– This will include page likes on Facebook, followers on Twitter, Google+ and YouTube.
  • Estimated traffic from similar web – This tool provides user engagement statistics for websites.
  • Blog Alexa Ranking – This tool provides commercial web traffic data and analytics.

Challenges in Influencer Marketing

  • Inability to attribute to ROI
  • Getting the right influencers and Lack of large quality influencers
  • Focusing on wrong goals/metrics – e.g. Twitter Hashtag
  • Transparency of Pricing – No metrics/benchmark

What ROI to expect?

  • Short Term: Engagement, Content Creation
  • Mid Term: SEO
  • Long Term: Brand Building, Loyalty, Sales

Challenges for an Influencer

Based on our interactions with influencers, the survey we ran amongst influencers, and learnings from various events such as Social Media Week Bengaluru, there are a few challenges in influencer marketing.

  • Brief is not always clear
  • Not enough freedom given
  • Payment delays
  • Changes mid-way during campaign
  • Not communicating expectations upfront

Those of you who missed the first four editions of the Digital Chai Pe Charcha can check them out below:

 

You can follow us on Facebook and Twitter! Check out the hashtag #DigitalCPC for more details on the next Digital Chai Pe Charcha meet.

Social Beat held its 1st Digital Leadership Summit

Key Highlights from the Social Beat Digital Leadership Summit 2016:

  • Measuring ROI from digital marketing and content marketing are the biggest challenges faced
  • Carat Lane tracks 4000 data points in order to measure the effectiveness of its marketing campaigns – says Mithun Sacheti, Founder of Carat Lane
  • Lifetime value of the customer is key to understanding ROI from any medium, including digital
  • Different digital channels work differently depending on the brands and the right attribution model helps track the results effectively
  • Content Marketing is less about marketing and more about content. Brand are allocating as much as 15% of their total marketing budget towards content marketing.

Chennai, 5th Aug 2016: The 1st Social Beat Digital Leadership Summit 2016 was a congregation of over 125 CMOs, Brand Heads & CXOs from varied industries. Mithun Sacheti, the Keynote Speaker kick started the Summit and shared insights on how a data driven approach at Carat Lane has helped it acquire customers and build a brand. Carat Lane’s internal team analyses over 4000 data points, from across channels, including TV, Retail, Print, Radio and Online Marketing.

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Speaking at the event, Mithun Sacheti, Founder Carat Lane said “Digital is going to be key for every business in India. The discovery of products and services is going to happen via digital, through consumption will be omni channel across digital, retail and other channels.” Emphasising on the importance of data and analytics Mithun said “The beauty of digital is that you can analyse and measure everything. It’s never too much data to decide your action items. At Carat Lane we analyse over 4000 data points on a monthly basis.”

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The keynote session was followed by a panel discussion on Measuring ROI from digital marketing. Moderating the panel, Suneil Chawla, Co-Founder of Social Beat, said “Depending on whether the business has a product which has high search volume or is an impulse purchase, Google or social media will be more effective.” Arasu Shankar from eShakti.com said “Apart from tracking the cost of acquiring a customer, it is important to understand the lifetime value of the customer in order to be able to understand the profitability of the business”.

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Peshwa Acharya, CMO of Sterling Holidays speaking at the event said “Digital transformation has already happened from the consumer’s perspective. Now it’s time for brands to wake up to this opportunity. There will be many inflection points, for example, COD in ecommerce. Brands need to anticipate and leverage these inflection points to their advantage.”

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The last discussion was around How Content Marketing can work for your brand with two successful brands, Matrimony and Murugappa Group sharing their experiences. Vijaylakshmi D, Senior Associate Vice President at Murugappa Group speaking on their successful content strategy around Madras Song said “Murugappa Group always had a strong connect with the city of Madras and we have had ongoing activities around this. When we looked at how do we connect with today’s generation we decided to use music and video as the medium to create the Madras Song to engage people to share their live for Madras.”. Murugappa Group in fact allocates close to 15% of marketing budget towards content marketing.

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Rajasekar KS, GM – Social Media & Content for Matrimony.com speaking on their HappyMarriages content initiative said “Content Marketing is more about content and less about marketing. If you can understand your consumer’s problems and leverage that to build content, then it will strike the right cord with the audience.”

 

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Speaking at the occasion, Vikas Chawla, Co-Founder of Social Beat summarised, “The digital medium is a powerful medium and only creativity is the limit. We hope that the experience sharing by CMOs and Marketing Heads would enable the entire industry to learn and grow their digital presence.”

Thanks to the entire organising team at Social Beat for pulling off the Summit – Kudos to them! And a big thank you to our partners – Zarget, Sublime Factory & Brandwave.

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Digital Chai Pe Charcha – Measuring ROI from Digital Marketing

The fifth edition of the Digital Chai Pe Charcha was held at our office on 9th July 2016. It received a wonderful response with about 25 participants including entrepreneurs, professionals, digital marketers and social media influencers taking an active part. The topic of discussion  was Measuring ROI from Digital Marketing.

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Here’s a quick summary of the key takeaways from the session:

Types of Returns from Digital Marketing

There are two types of returns from digital marketing:

1. Tangible Returns:

These are metrics that translate into immediate business results such as Leads, Sales, Registrations and Traffic

2. Intangible Returns :

These are metrics that do not measure immediate business results such as brand awareness, customer engagement, customer satisfaction and brand reputation.

Which Metrics Should You Measure?

Metrics you measure will depend on your business goals and objectives.

For example, if your objective is lead generation, then you would measure metrics such as Leads/Enquiries Generated, Revenue from Sales, App Installs and Website Traffic.

On the other hand, if your objective is brand awareness, then you would measure metrics like likes/fans/followers, reach, impressions, mentions, social engagement, likes/comments/shares and retweets/reposts.

Tools to Measure Results

There are a number of tools available to measure the metrics mentioned above. They could be categorised as web, mobile, and social media analytics tools.

Web Analytics tools:

There are a number of web analytics tools that you could use. You could use Google Analytics to understand details about the volume and quality of your website traffic. Tools like Kissmetrics, help determine advanced analytics on the behaviour of your users.

Mobile App Analytics Tool

For those of you have the mobile app for your business, tools like Mixpanel and Appsflyer help you learn how people use your app. It also helps draw insights from this data to optimize and improve your marketing for better ROI.

Social Media Analytics Tools:

These tools help you analyze the effectiveness of your social media marketing efforts by measuring metrics like likes/fans/followers, reach, impressions, mentions, engagement, likes/comments/shares and retweets/reposts. Social platforms like Facebook, Twitter, Pinterest, and LinkedIn have inbuilt analytics tools for marketers to analyze the effectiveness of their marketing efforts. Other advanced analytics tools for social media intelligence include Radian6 and Simply Measured.

Call Tracking:

With the growth in mobile use globally, the number of leads coming through phone calls is increasing rapidly as compared to leads through web forms. In this scenario, it is important to use tools like Knowlarity and Exotel to track call leads effectively and attribute them to the right source.

Measuring ROI from a Digital Marketing Channel

The simplest way to measure if ROI from a channel would be positive, is by checking if the Customer Lifetime Value (LTV) is greater than the cost of acquiring a customer through that channel.

The table below will help you with a simplified framework to calculate LTV. For more details on LTV calculation, you can read our article on Customer Lifecycle Value vs Cost of Acquisition in E-commerce.

LTV Metrics

Participants then did this analysis of LTV and cost of acquisition to calculate channel ROI for their businesses. They shared their learnings with the rest of the group. This was followed by an interactive discussion and Q&A session.

Those of you who missed the first four editions of the Digital Chai Pe Charcha can check them out below:

Edition 1 – Challenges Faced In Marketing A Startup

Edition 2 – Content Marketing Success In 2016

Edition 3  – 101 On Digital Advertising For Startups

Edition 4 – How To Use Instagram For Business

You can follow us on Facebook and Twitter! Check out the hashtag #DigitalCPC for more details on the next Digital Chai Pe Charcha meet.

What methodology do you use to calculate ROI from your digital marketing efforts? Do share your method, experience, and learnings in the comments below!