How to Use Analytics to Optimize Your Marketing Budget
To avoid regrets about your advertising and marketing expenses, you have to do three things: spend money on marketing, set up analytics, and constantly track your analytics. Read on to learn how to use analytics not only for reporting but to avoid draining your budget.
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Table of contents
- Signs that your marketing budget isn’t optimized
- How analytics helps you spend your ad budget efficiently
- Wrapping up
Signs that your marketing budget isn’t optimized
Your advertising campaigns are inefficient
Metrics that indicate efficiency will be different for each business sphere and even each separate campaign. But in general, an advertising campaign is inefficient if you spend more than you earn in the long run. Also, your campaigns are inefficient if your KPIs don’t show a tendency toward constant growth or don’t generate a certain quantity of leads that make your business profitable. Last but not least, if you can’t tell which campaign is truly efficient, then most likely all of your campaigns are inefficient.
You drain your budget on PPC
Have you ever wasted your monthly budget in one day because of some anomaly due to an improperly set up pay-per-click (PPC) ad campaign? If you constantly drain your PPC budget because of human errors, you won’t spend your money efficiently.
You attribute costs to the wrong channels
According to Hubspot, 52% of marketers use attribution reporting. Depending on the attribution model, the main channel (or sequence of channels) gets most of the value, which leads to spending most of the budget on it (or them). But if your model doesn’t reflect reality, you’ll distribute your budget inefficiently and will leave growth zones in truly efficient channels unrevealed.
You may know of other indicators of an inefficient use of your marketing budget. If you do, let us know in the comments below.
How analytics helps you spend your ad budget efficiently
Get your expenses and ROAS under control
To optimize your marketing budget, you have to find out what exactly you’re spending it on. Focus on ad cost and generated revenue. To measure these KPIs properly, even Google Analytics might not be enough. You’ll need a specialized tool that will control your data quality and guarantee real values in your cost/revenue calculations.
Analyze all your data: audience segments, keyword groups, landing pages
No insights can hide from deep data analysis! Here’s a small to-do list to benefit from your marketing data:
- Collect all data you have in one secure place (Google BigQuery)
- Merge your data properly and set up automatic updates (with OWOX BI)
- Apply segmentation: use cohort analysis and funnel based segmentation of data collected in Google BigQuery
- Go deeper than ad campaign analysis — analyze the efficiency of your keywords, products, and landing pages based on complete information on your customers’ behavior and advertising efforts (read about how to do that here).
- Find keywords, products, and landing pages that decrease ROAS (and find the reasons for this) by analyzing the customer journey and advertising campaign performance.
- Conduct ROPO analysis to find out how offline and online channels influence each other.
- Experiment with attribution models until you find the most efficient one to improve your advertising campaign management.
You may find a campaign that used to be efficient doesn’t work anymore because your audience’s intent has changed. Or you may see that your Instagram advertising works much better that you thought in comparison to other social media advertising. These are your growth zones.
Activate your data
Once you’re done merging basic data and configuring automatic data updates, the next stage of your budget optimization is to minimize human errors and avoid decisions based on gut feelings. To activate your data:
- launch A/B tests for your segments and audiences
- personalize your offers for your segments and cohorts, improve conversion rates, and start saving your advertising budgets
- use your results of data analysis to create audiences for external advertising and marketing automation services
- calculate your future conversion level to improve planning for your advertising campaign budgets
If you’re ready for the real results acquired from your data, apply the machine learning funnel based attribution model by OWOX BI:
At this stage, you can find places to save money and invest it in more efficient channels and campaigns.
Automate your budget management
We’ve described this stage in detail in our article on marketing automation. However, we should mention that at this stage you can optimize your advertising budget by:
- configuring an automatic bid management system that turns off categories of keywords and campaigns or launches others
- automating control of daily budget limits;
- maximizing the efficiency of remarketing and lead generation communication threads via email — for example, by sending automated abandoned cart emails plus launching special offers via Facebook on goods from abandoned carts
Dealing with modern marketing without analytics is like hanging by a fingernail over the edge of a cliff. Building actionable analytics is taking responsibility for your actions and the results of your work.
Here at OWOX, we’re ready to help you evolve your analytics and increase growth indicators for your business. Don’t forget to subscribe to our newsletter to stay in touch.