Measuring ROI from paid marketing for B2B is a critical problem a lot of marketers are trying to tackle. B2B marketing is not transactional, and that’s easy to forget. ROI is measured along a cycle that could span weeks or months depending on your industry and business model. During this time, the customer engages with your brand in a variety of ways.
This post will provide some strategic tactics marketers can use to better measure B2B advertising effectiveness, and provide a list of KPIs expert marketers are measuring to help them hit their ROAS goals.
Track Every Dollar
In the past, tracking the ROI of a digital ad was similar to how billboards are still measured today–throw it up and hope for the best. There was no good way to measure the effectiveness of what brands were sharing. That lead to lots of top-of-funnel effort: views, impressions, clicks, etc. No doubt those traditional marketers were driving revenue, but no one could effectively measure the impact.
Today, with the advent of tactics like remarketing, and uploading custom audiences to target people at specific stages, we can effectively carry out full-cycle marketing. Marketers now have the strategy and knowledge (and responsibility) to close the loop!
To do that, my advice is to invest in an automated solution! The marketing landscape today consists of a wide range of tools to measure and optimize everything from content to campaigns (check out AdStage!).
This also means that your competition is likely taking advantage of data and technology to improve their own marketing. Since you can now automate tasks that are sucking up loads of time, a million rows in your Excel sheet isn’t something to brag about, it’s something to streamline! Automate the consolidation of data to focus on the stuff that matters.
Create KPIs and Measure Outcomes
Are you familiar with the Iceberg Principle? It states that only a small amount (the ‘tip’) of information is available or visible when the ‘real’ information or bulk of data is unseen, deep down in the water.
As recently as 5 years ago, marketers were fully focused on clicks, but missing out entirely on quality, and therefore actual value. You can drive 100,000 people to your site, but that doesn’t matter if they’re not taking action beyond that. By focusing on top-of-funnel metrics, you’re missing the whole story, and more often than not, when you dig deeper, you might find out that you’re driving the wrong kind of traffic.
A click is just a small part of the overall story. In a marketer’s iceberg, at the absolute very least, you must ensure that you’re optimizing for MQLs (Marketing Qualified Leads). But to be truly successful, you have to go even deeper, and optimize for SQLs (Sales Qualified Leads) and beyond. So don’t stop at MQL. Go deeper!
The meaningful data lies beneath the surface.
So how do you do that? With a little marketing math. The metrics below are what everyone’s daily dashboard should show. Then, knowing that 1% of leads turn into customers, work backward with this math.
If you know that you need to drive more SQLs, for example, you can prioritize which initiatives or projects you need to work on. Use this math to identify the lowest hanging fruit or projects that can help move the needle the most.
Play around with this formula to better understand your funnel. This exercise will help you identify stages where you might be losing good prospects and where to focus. On top of this formula, you MUST have a system in place to track your efforts, especially if you’re spending money to acquire customers.
Otherwise, you won’t know your ROAS (Return On Ad Spend) and therefore won’t be able to measure how effective your efforts were at producing results.
Measure Pipeline Contribution Back to Campaigns
Now we’ll dig into how to surface the numbers you need to accurately prove ROAS by connecting ad data to down-funnel metrics. The most effective way to do that is to use hidden fields to pass more data into the CRM. Let me explain.
The vast majority of B2B companies use forms as a lead capture mechanism on their websites. For these forms, businesses generally rely on a third-party marketing automation system like Marketo or HubSpot. When a form is built, you can embed hidden fields called UTMs (Urchin Tracking Modules), which help you capture additional information when someone fills out and submits the form.
On a form, you’re likely already tracking things like name, company, and email address. But you also want to know where the person came from.
How did they land on this page?
You can use these hidden fields, or UTMs, to learn this information. Using UTMs, you can track back to parameters like content, medium, or source. When you send all this information along to your CRM, you can also include these referral tracking parameters.
The next step requires you to pull your CRM reports. If you’re doing this manually, you will need to download all of your ad data down to the URL because that’s where your tracking parameters are (the UTM parameters). Then put all this information into Google Sheets. For the CRM side of the data (we use Salesforce in this example), use G-Connector to pull data from Salesforce and drop into your Google Sheets.
You could run reports such as an opportunity report or a lead report. In that report be sure to expose the UTM parameters as columns. Now it’s time to play the matching game. Drawing lines from one side to the other side, using VLOOKUP to match the data sets and try to combine them into one set. Beware, this can be very manual, time-consuming, and prone to error.
Using this data, you can now show the value of your ad campaigns! If you can map your offline conversions to online campaigns, you want to end up with a table like the one below. An easy, visual summary of your results and progress that shows spend, MQLs, SQLs, and most importantly, cost.
Determine ROI and Report Regularly
CRM tools used to be the sales’ domain, but marketers are now using them as well. Because we’re smart marketers, we’re technically the ones that sent a lot of the data into the CRM systems through forms and hidden fields. It makes sense that we should now leverage it by creating marketing dashboards that align with sales.
But note that one important piece of information missing in the CRM is the ad cost. If you just report in the CRM, you’re not going to be able to optimize to the actual ad that delivered those customers. You will have to bridge that gap either manually in Google Sheets, or automatically through products like AdStage.
Once you can link metrics that illustrate a customer’s entire journey, you can finally dial-up campaigns that actually work, and turn off the ones that don’t yield bankable results. In essence, you stop optimizing for leads and start optimizing for customers.
For example, in the table below you can clearly show which ad network yields the best return. You can then make a more informed decision on how to allocate budget.
By connecting your ad data to sales data, instead of reporting on clicks, you can report on revenue. With this approach, you can show marketing’s contribution to the sales pipeline and also prove how much marketing is contributing to driving SQLs, closed deals, and ultimately revenue.
KPIs to Measure
As you sit down to adjust your processes and reporting, be sure these KPIs are at the top of the list. These are the metrics you need to determine your ROAS.
SQLs are the new MQLs
- Sales and marketing alignment is more important than ever and when marketing is measuring for sales goals, a natural bridge is formed.
Contribution to pipeline
- Marketing can grow its value to the organization by focusing on leads that are more likely to turn into paying customers.
Contribution to closed-won deals
- Ideally, the sales team is giving credit to marketing every time a close bell rings. The organization as a whole should strive to understand where the lead came from and the steps along the way that helped close the deal.
Actualized revenue from marketing campaigns
- You should be able to answer “What is my ROAS from my spend?”
Now you’re armed with the strategies that will help you set up and measure full-cycle, down funnel marketing campaigns. With every campaign, remember that clicks and impressions are out, and expert marketers are now zeroed in on ROAS.
About the Author
Sahil Jain is the CEO and Founder of AdStage. Prior to founding AdStage in May 2012, Sahil co-founded his firstcompany, Y-Combinator backed Trigger.io at 20.
He dropped out of UC Berkeley, where he studied Philosophy andEcon, to join AOL Corp Devt. at 19.