The decorations are still on the house and if you are like me you still have leftover turkey and eggnog in the refrigerator. For those of us in e-commerce, the last six weeks have been the busiest time of the year. Although, it may be tempting to take a break, put your feet up and watch some New Year’s Day football, it is also an essential time of the year to start thinking about next year and what you can do to make it more successful.
Your advertising efforts are all fresh and to analyze your results now will be well worthwhile in laying the framework for next year. Here is a list of the top 8 things to do when reviewing your Q4 marketing results.
1. Did your analytics program track your results properly? A good analytics program is worth its weight in gold. Without a proper analytics program, you can still figure out some key sales metrics by looking at your different marketing channels, but it will be a difficult task to see the complete marketing picture. If your analytics program did not track properly or worse you do not have an analytics program installed, DO NOT hesitate and make it priority 1 for the new year. Get analytics in place before you begin spending marketing dollars in the new year. Google Analytics is free with an AdWords account and is quite effective in tracking revenue sources and much more.
2. The most important metric – ROAS (Rate on Advertising Spend). Rate on Advertising Spend (ROAS) measures dollars spent to dollars earned on your marketing channels. To calculate, divide revenue generated by ad dollars spent on each channel. For example, let’s assume you spent $8K in December on Google AdWords and generated $45K in revenue; your ROAS would be 5.62 meaning you earned $5.62 for every $1 you spent. A full cost analysis is required to determine your total profitability, but this metric will easily allow you to identify and rank the success of your marketing channels. Note, if you don’t have an analytics program such as Google Analytics installed, use average sale price and multiple by conversions and use that number for your dollars earned. It won’t be perfect, but it should give you an adequate ballpark figure.
3. The next metric to pay attention to is CPA or Cost Per Acquisition. To calculate, divide the cost by number of conversions. For example, let’s assume you had 100 conversions and spent $1,000. Your CPA would be $10. Compare that number to your cost of goods plus shipping costs. Is the CPA low enough to generate a healthy profit on every marketing channel? It sure better be because during Q4 for most ecommerce companies your CPA is going to be at the lowest level of the year. If you are not making a profit on each marketing channel in Q4, if that is in fact your busy time, you need to make changes now to your marketing strategy before 2015 starts.
4. Dig in to your campaigns. Really get into your campaigns. You are going to want to analyze both ROAS and CPA on the campaign level all the way to the keyword level (for highly trafficked keywords). Generally, not only does Q4 generate the lowest CPA and ROAS of the year, but it also generates the most traffic, providing a ton of data. Only by fully diving into your data can you find those hidden gems that help account for highly profitable sales and those landmines that were busy eating your marketing budget.
5. Act on the facts. Once you have taken the time to analyze your marketing efforts make sure you act. For Pay Per Click Campaigns, raise bids for keywords that worked, lower or pause bids for keywords that didn’t provide sufficient numbers. This should be done throughout the year, but the best time to do an in-depth review is the beginning of the year when data and revenue levels should be at a premium.
6. Review your ads. Did you have ads that were geared toward the holiday season? If so, those ads may no longer be relevant. Make sure your marketing is current.
7. Review your traffic – With more and more people shopping on mobile devices and tablets, it is more important than ever to make sure you know your numbers. How did your conversions, CPA and ROI numbers look on across different devices? Are you bidding the same amount for all devices? It is important to know, track and optimize as needed.
8. Review new channels – Did you start a new marketing channel during Q4? Maybe you ran a test budget for one of the CSE (comparison shopping engines) like PriceGrabber or Amazon Product Ads. Q4 is a great time to add to your marketing efforts, but it is important to make sure it was a success before moving into next year.
Reviewing fourth quarter marketing takes time and you will need to plod through extensive numbers to properly evaluate, but doing the work at the beginning of a new year can save advertisers substantial budget and is essential in optimizing sales. Reviewing marketing today is a task that will pay dividends all year long!
Still need help or looking for someone to bounce ideas off? I am currently offering free marketing strategy sessions to those interested. Contact True Online Presence at 1-888-456-6943 to schedule.
Andy Splichal is an online marketing strategist with more than a decade and a half of experience helping companies increase their online presence and profitable revenues. Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.