ROI and Completing the Digital Loop to Understand Digital Marketing Campaigns

When discussing the impact of a digital ad campaign, ROI is very rarely discussed in depth. Instead, one of the biggest indicators when it comes to online marketing is the click-through rate (CTR). It’s a measurement of the number of clicks an advertiser receives on their ads per number of impressions and is simply calculated by taking the Total Clicks on Ad divided by Total Impressions.

For most online e-commerce stores this is one of the best indicators of how well an advertisement or email campaign is doing. There’s good reason for that since it easily tells you how well an ad convinces someone to click the link and bring them to a retailer’s online store.

So What’s the Problem?

The click-through rate is very important and that shouldn’t be understated—but there is a critical issue for physical retailers that is easily illustrated with the following example.

A department store is running a campaign runs a Facebook ad campaign that targets 10,000 of their customers that they have on their contact list and cost $2,000. Of those 10,000 that see the ad 2,000 of them click-through a link which means that 20% clicked-through which is a great rate.

But here is the big question: how many of those 2,000 people actually returned to the department store and purchased something?

With the above example, an argument can be made that the campaign was highly successful with an above average click-through. However, as far as understanding how much revenue was generated from the campaign your guess is as good as mine.

An Unsuccessful Success

Let’s say that the average customer to the retail location spends $20. Using only the click-through rate as a metric it seems like a no-brainer to run the campaign again and which the department store does four more times. To keep everything simple, let’s say that each time had exactly the same result so that all five campaigns cost $10,000 altogether and that there were 10,000 click-throughs.

What the department store doesn’t know is that only 50 people of each 2,000 actually returned to visit the store meaning that the campaign only grossed $5,000 after spending $10,000. That means that despite a high CTR the campaigns actually lost the department store $5,000. This is why knowing the Return on Investment (ROI) is critically important.

ROI Closes the Digital Loop

The Aislelabs Connect WiFi marketing platform comes built in with our Campaign platform which provides an ROI metric. The way this works is very simple. Those who click through the ad are then recorded on the system. When they return to the department store, the wireless infrastructure picks up their phones and can then correlate those who were marketed to and those who returned. This allows the platform to accurately estimate the ROI to provide real numbers and closes the digital loop.

ROI is incredibly difficult to calculate for e-commerce and brick-and-mortar stores. However, with a solution like Connect, it is automatically and easily calculated for you with every campaign.

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Aislelabs is the leading global provider of enterprise software for marketing automation, location analytics, predictive intelligence, and combining online and offline customer touchpoints. The company serves customers across verticals including retail, transportation, hospitality, venues, and F&B.

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