How to Track and Measure ROI for Online Marketing

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Dominic Gluchowski, Search Director for SEO Falcon uncovers how to leverage Google Analytics in order to accurately capture and measure return on investment for various online marketing initiatives.

It can be difficult at the best of times to report return on investment (ROI) for online marketing initiatives, particularly when you have multiple campaigns and sources of traffic. Results from Google Analytics though comprehensive, can be misleading if not setup and interpreted correctly.

Something to note in particular is that Google Analytics attributes the ‘last click’ to a sale (or to a completed goal), meaning that it sometimes does not credit the initial traffic source/search term with a sale, making it difficult to assign exact ROI to various marketing campaigns.

For example, an individual may want to purchase a ‘LCD TV’ and initially conduct a search through a search engine, yielding results for various brands and stores. However, when they make a decision to actually purchase the product (based on the search engine results), they may not necessarily follow the same online path and in most instances are likely to search for the ‘brand name of the online store’, go to the website and then make their purchase. In turn, Google Analytics will attribute the sale to the last search term (e.g. ‘brand name of the online store’) rather than the initially searched term (e.g. ‘LCD TV’); although it is unlikely that the store would have made the sale if it’s website was not optimised for this term and it didn’t appear under in the ‘LCD TV’ search results.

Fortunately Google Analytics Advanced Segments can help to understand the initial traffic sources that contribute to sales and completed goals. You can ensure that you are correctly capturing referring sources and effectively measuring ROI on your marketing initiatives by following these steps to set it up:

Step 1. Click on Advanced Segments in Google Analytics and then click ‘+ Create new custom segment’.

Step 2. Go to Dimensions and drag Count of Visits to the ‘dimension or metric’ box, then select Conditions to ‘Matches Exactly’ and Value ‘1’ for the first time visitor.

You can set up similar advanced segments for any number of visitors.

Step 3. Go to Traffic Sources > All Traffic Sources, select ‘1-timer’ in the ‘Advanced Segments’ and you will be able to see the main traffic sources that contribute to driving first time visitors to your website.

Step 4. You can also select Traffic Sources > Keywords to see the search terms that are most important in driving first time visitors to your website.

The visibility of the initial traffic sources/search terms should assist you in measuring ROI and allocating your marketing budget based on the campaigns that deliver the most successful results. This same principle can be applied to other marketing initiatives, such as banner advertising, competitions, social media and sponsorships.

Furthermore it will provide you with the ability to identify which sources your first, second, third-time visitors, etc, come from; which pages and products they viewed on your website; and how likely are they to purchase from you. You will then be able to target and optimise your campaigns for each type of visitor.

Article by Dominic Gluchowski

Dominic Gluchowski is a Search Director at boutique search engine marketing agency, SEO Falcon (www.seofalcon.com.au). He is also a co-founder of www.ilovecoupons.com.au and a number of companies which are currently in stealth mode. His background is in website optimisation, SEO, sales and marketing, in which he has worked for the past 10 years. You can follow Dominic on Twitter: @Dom_Gluchowski

Comments

1. Laura Siri 16th May

   Great article Dominic! Any advice on how we can strategically measure and allocate our budgets to increase ROI is much appreciated. Looking forward to more of your expertise.