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The Case of Measuring Offline vs. Online ROI

24 April 2012 BY

One of the most frustrating things I face on a daily basis is other marketing channels reporting back using BS metrics. Today I’d like to share a recent example of measuring ROI across all channels and levelling the playing field to determine the performance of the different channels.

A bit of background

In the example I am going to use the digital marketing budget is 30% of the overall marketing budget with
SEO getting less than 5% of the overall budget. We continually went back to the client with exceptional ROI numbers and areas where we can deliver increases but they constantly said that there was no room for budget expansion and no more time could be spent on the account.

We then were asked to sit in a broader marketing meeting I was amazed at the fluff and rubbish that was reported back from the offline marketing channel. Cost per response in my opinion is fluff and it takes 5 seconds on a spread sheet to return an ROI percentage. It won’t be 100% accurate but it’s far better than not measuring at all. They were also not reporting back on how the offline spend was affecting direct traffic or brand search traffic and we saw consistent declines in both. They just assumed that it happened and had a flippant attitude to it. From my perspective it was time to shake their ivory tower a little.

Annotations, Annotations and more Annotations

We started by suggesting that we determine any effect that the print advertising was having on the brand search and direct traffic for the last quarter. We then waded through reams of reports and annotated every time we had a print insertion, which newspaper that was in and the price paid. Once we stepped back we saw very little correlation to either. At a push it affected both by around 100 visits for that day and then slipped back to normal numbers. We then correlated the data against the online conversions for that day and again saw very little correlation. Once we went through the numbers with the client we decided to use the figure of 10% for print advertisings’ online influence.

Digesting the Print Numbers

To be fair to the print channel they did try and drive more people to call than visit the website so we had to digest their cost per response metric to something more useful. It must also be said that we had no call numbers segmented into the other channels so we would be underreporting revenue from them. That’s something were working on with them now.

We spoke to the call centre manager and he told us the average conversion rate and average order value from the call centre. This allowed us to compute an ROI from the print; I’m not saying that its 100% accurate but it’s far better than comparing apples with peanuts.

Tying it all together

The rest was fairly easy to put together. We measured the ROI from non-brand paid and organic and the other display channels they were using. We also measured the cross channel attribution metrics and found in their instance most people stuck to a search or direct channel, there wasn’t a great deal of cross-over. We added the 10% direct + brand search revenue to the call centre ROI to determine the print revenue with the rest being residual brand value.

Results

The print did deliver some ROI but given the margins in their industry it wasn’t nearly enough. Digital Marketing in all forms outperformed their offline counterparts and this was the main point in the measurement. The client didn’t want to swing more budget into online immediately but our advice was to scale back print in Q2 and measure the effect if any. If there was an effect then they could increase budget spend in Q3 and Q4 to compensate. If not they could expand their digital programmes. It was also great to see SEO at the top of that pile with 3100% ROI and  that’s without any call center revenue :)

AUTHORED BY:
h

Louis Venter is the founding director and CEO of MediaVision, a Search Engine Marketing (SEM) company specialising in all areas of search. His particular interests are organic search marketing, paid search marketing, conversion strategy and online PR.