Extra! Extra!

Many of our clients ask us how to justify larger web marketing budgets to their executives.  One of the obvious places to start is an ROI analysis or a cost/benefit analysis.  If there is no straight forward conversion event (i.e. Lead Generation or eCommerce), it can be difficult to measure how effective web marketing is.  In some cases, web budgets need to be analyzed as a cost of doing business.

Marketing budgets are often divided up into channels/segments such as events, print, mail, television, radio, etc.  The sales team, often operating on a separate budget, actually spends budget on some channels with the same goals as marketing - such as inside sales.

When analyzing how the marketing budgets should grow (or shrink) an organization should analyze how the different channels stack up against each other for common variables. 

For example, as a touch-point (impression), ask your team to quantify how often each channel serves as a touch-point for potential and current customers.

Another example would be to put a cost to each impression.  Take the total budget per channel and divide it by the number of touch-points (impressions). 

From these numbers, as a channel for interaction with potential and current customers, the website and email are the most cost effective.  Adding conversion rates to this table may paint a different picture.  Analyzing budgets in this fashion shows that online channels are more cost effective at interacting with potential and current customers.

This entry was posted on Monday, September 21st, 2009 at 9:37 am and is filed under User Experience. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.