Optimizing Digital Marketing Investments for Improved Results
Unravelling the Performance Gap Between Digital Marketing Spending and Returns
In a post-pandemic world, companies have significantly increased their digital marketing budgets, leveraging these resources to reach their customers and drive revenue. However, a growing concern is the performance gap between spending and returns, leaving marketers perplexed on how to optimise their digital marketing strategies.
Christine Moorman, Jana Soli, and Dennis Cardoso, in an article for Harvard Business Review, delve into this issue, providing valuable insights for marketers keen on closing this performance gap. They identify several factors contributing to this discrepancy and offer strategic solutions to streamline digital marketing plans and enhance performance outcomes.
One major challenge lies in the fragmentation of digital marketing organisations, with companies focusing predominantly on optimising their websites. The experts suggest that there is a need to develop a fully-integrated digital marketing organisation, going beyond website optimisation to building data analytics capabilities, learning to convert data analytics insights into actionable metrics, and mapping the omnichannel customer journey.
Analyzing data is complex, and companies must take time to understand this new terrain. Marketers need to identify key metrics, test iterate, and implement these metrics to inform future actions. Mapping the customer journey is equally complex, as companies interact with customers across various digital touchpoints. The inability to accurately track and assign touchpoints affects a company's ability to quantify platform-specific contributions.
The growing demand for privacy has led to the weaning out of third-party data, once an essential data source. Companies must invest in privacy-related safeguards while working to understand their customers beyond their websites and applications. To create genuine customer value, marketers must collaborate with best talent across functions, build a culture of innovation, and focus on driving growth through their digital marketing strategies.
The experts emphasise the importance of strategic experimentation, continuous learning, personalised services, and leveraging technology like AI and machine learning to make informed decisions, improve performance, and drive tangible returns on digital marketing investments.
To bridge the performance gap, marketers must adapt to these trends and employ tailored strategies to deliver growth and drive convergent returns on their expenditure. By integrating tactics and aligning personalization efforts with clear business objectives, prioritising actions based on impact and feasibility, using data-driven monitoring, optimizing website and SEO, leveraging paid search with precision, refining content and social media strategies, employing conversion rate optimization, embracing automation, and adopting scenario-based budget planning, marketers can create adaptable, high-impact digital marketing plans that generate tangible returns, leaving the performance gap a thing of the past.
In the pursuit of diminishing the performance gap in digital marketing, experts suggest leveraging technology such as machine learning to make informed decisions and drive growth. To this end, they advise marketers to implement machine learning techniques in their strategies, transforming data into actionable metrics and mapping the omnichannel customer journey for better targeted marketing.
As privacy concerns and the loss of third-party data arise, marketers are encouraged to invest in privacy-related safeguards and focus on understanding their customers beyond websites and applications. This holistic approach could include integrating machine learning into their strategies, allowing them to create more personalized services, thus enhancing their performance returns.
