MediaPublishingHow To Get Your Money's Worth Online

How To Get Your Money's Worth Online

Part one told you how web advertising actually works. Part two explained the metrics and capabilities of online advertising and how to measure ROI. Part three is all about ROI tracking, showing you how online media offers something other media can boast: inherent accountability.

(Part three of three.)

Part one of this series focused on how web advertising actually works. Part two discussed the metrics and capabilities of online advertising, explaining that we now have the ability to accurately measure ROI. This installment will focus on how tracking technology can be applied to determine ROI. For advertisers like myself, ROI tracking is both a blessing and a curse because it holds the Internet to a higher standard than other advertising media out there. It also offers something that no other media can boast: Inherent accountability.

The key to ROI tracking is in tracking individual “events.” These events can be tracked by a 1×1 pixel “tag” that is placed on specific pages of your site. To see how many times an event occurred, you count the number of hits to that “tag.”

Note: When placing a tag, you’ll need to put it on the page after the event takes place. So to track a click, you track the hits to the homepage. To track a sale, you tag the “thanks for purchasing” page, and so on. What’s really nice about ROI tracking is that you can track an unlimited number of events. And the events can be tracked back to the source either by assigning them unique URLs, i.e., and, or by using some form of CGI scripting.

The first step in setting up ROI tracking should be to assess your needs. For example:

  • What are the goals of the campaign?
  • What do we want to learn?
  • What metrics will help us improve the campaign?

Let’s say you’re promoting a credit card offer online and the goal of the campaign is to sign up new cardholders for $50 or less. The sales process goes through two phases: 1) a visitor is asked to fill out an online form for more information, and 2) these leads are urged to register as cardholders.

At this point, you have enough information to answer the fundamental questions about the campaign and set up the ROI tracking accordingly:

Are people responding to the offer? Are the banners getting clicks?
1. Track the hits to the web site.

Are we getting leads? Where are they coming from?
2. Track the sign-ups for more information.

How many people are becoming new cardholders? What sites are producing them?
3. Track the final registrations.

What is the ratio of people requesting more information to those actually signing up? Are some sites better at converting prospects into signups?
4. Track the conversion of leads to sales.

Once you’ve set up the tracking and collected the data, you can determine a “cost per sale” or “cost per cardholder” figure for each site. By comparing ROI data to the original goal of $50 per sale, you can quickly decide which sites to keep and which ones to cancel. This process of tracking ROI and cutting out the most expensive sites is commonly referred to as “campaign optimization.”

Here are some other ways you can use ROI tracking to improve your online marketing efforts:

Monitor your conversion rate from lead to sale. By tracking your leads and sales per site, you can determine which sites have the best conversion rates and how much time to allow to convert a lead into a sale. This is especially useful if your product requires a lot of research before the decision to purchase, for example, a luxury automobile.

Perform market research. In the example of the automobile, by monitoring the number of leads generated and the number of products purchased, you can determine an average conversion rate. Then you might try to improve on that conversion rate by changing outside variables. For example, you could decrease the price of the car or you could run a special promotion. Because online advertising produces instant results, this is a great way to test the waters before making major changes to your campaign.

Distinguish quality vs. quantity of visitors. They say in the traditional advertising world that a message must be seen seven times before it’s remembered. Online, that number is probably even higher. ROI tracking can minimize the cost to determine which sites are producing the most qualified visitors vs. a high number of visitors, and what mix is right for you.

Determine the right media mix. Let’s say you have an e-commerce store, and you want to use a wide variety of online and traditional media to send people to your store. With ROI tracking, you could assign each media type with a unique URL, and then compare the number of sales made to each one. Let’s say you choose the following traditional media: radio, direct mail, newspaper, and outdoor. Then you choose the following online media: banners, email newsletters, email list rentals, and site sponsorships. With ROI tracking, you can determine how much money to allocate to traditional vs. online media, and then what type of media mix to use for each one.

Define your target audience. Perhaps you’re not quite sure who your target is. With ROI tracking on several different kinds of sites, you can determine which target group is the most responsive. In the case of the luxury automobile, you might try golf sites, financial sites, retirement sites, and executive business sites. Many online marketers recommend starting with a very broad base of sites at the beginning of a campaign, and then gradually refining as you learn more about your target audience.

Test creative messaging. ROI tracking can be used to test creative messaging to see what works best. For example, you might be debating whether to offer a better price or more features than your competitors. By tracking not only which banners get the most clicks but also which ones make the most sales, you can determine which message to use and which banners convey that message best.

These are just a few of the possibilities for ROI tracking. The point is, we are not discussing the future of web advertising or its potential in years to come; these are the methods being used today by the top interactive agencies that can be applied to your marketing efforts right now. Hopefully, this article will serve as a springboard for ideas to improve your company’s advertising efforts.

So let ’em debate the definition of impressions and clicks until they’re blue in the face. Let ’em rant and rave about whether or not banner advertising is dead. Let ’em dump their money into a bottomless pit like it’s New Year’s Eve in Vegas. Meanwhile — you can demand accountability for your hard-earned advertising dollars and you can track your campaigns to the sale.

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