Metrics in the Matrix: Maximizing digital ad spends for retailers

By Hyaat Chaudhary, CEO, Carbon Media Group



At a time when the traditional separation between online and brick-and-mortar retailers is blurring, brands need to be smarter to win on the digital front. The ability to establish a presence online — and to capitalize on digital marketing and promotions driven by social media and other online tools — is no longer a luxury: it is a necessity.



Understanding how to measure the impact of digital ad dollars is important to maximize ROI. For accurate measurement, retailers need to understand how to effectively select and track key metrics, embrace tools and tactics to identify and connect with key shopping audiences, and be familiar with emerging trends, new features and next-generation tools.



Incentivize

The Holy Grail for gauging the effectiveness of a digital spend is the ability to make a direct connection between the cost of the campaign and its impact on in-store sales. This correlation is fairly easy to make for online retailers, but is more of a challenge for brick-and-mortar. One solution is to offer digital incentives and promotions, like Groupon, that require customers to come into the store to take advantage of them. Promotional codes and in-store redemptions can help track closure rates and make it possible to directly connect gross metrics to ROI. More sophisticated retailers are already offering apps and other mobile-friendly promotions to accomplish this.



Focus on the “where”

For many chain retailers, the most effective tactic is geotargeting — an enhanced digital marketing method allowing brands to directly target specific locations or regions. Automated methods, like Google AdWords, or digital media partners can help create an optimal geotargeting strategy that avoids wasting bandwidth and deploying resources inefficiently.



Put it in context

Beyond geotargeting, establishing contextual relevancy is another effective way to reach customers and is a growing trend to find new ways to target niche audiences. In our area of expertise, for example, a sporting goods or outdoor retailer advertising on hunting, fishing or surfing websites is a much more efficient strategy than working with more broad-based consumer sites. Outdoor brands such as Gander Mountain, REI, Cabela’s and Dick’s Sporting Goods successfully utilize this style of contextual targeting. Most brick-and-mortar retailers have a clear idea of who their prime customers are, making this a straightforward and effective digital strategy.



Behavioral

Consider integrating information from the next level beyond contextual precision: behavioral targeting. Behavioral strategies move beyond what you are selling and where you are based to hone in on the actions consumers take that may indicate interest in buying your product. Behavioral strategies begin with basic demographic data and can drill down deeper into spending habits and preferences.



Be selective about data

One of the challenges for retailers looking to use demographic data to help target their digital advertising and promotions is the difficulty of evaluating the accuracy, relevancy and value of that data. Because today’s data comes from so many disparate sources (and in such enormously high and ever-increasing volumes), assessing the quality of that information is difficult. Basic demographic data is still the most reliable, which is one of the reasons why it makes sense to avoid overspending on fine granular data that is expensive relative to ROI. Over the long term, the best, most accurate and most relevant insights come from your own internal evaluations and measurement — not from purchasing outside data.



Open up the cookie jar

Many brands now utilize customer email lists and convert them into a “cookie pool” targeting customers across the web with display ads that “follow” them from one website to the next. Remember, if you have a website, every action a user takes on your site is data for you, and there are tools out there to gather that data. For service retailers, one in-house solution is to utilize a dedicated phone number specific to the ad/campaign, making it an effective and easy way to track metrics.



Avoid overtargeting

Beyond a diminishing ROI curve, another reason to be leery about diving too deep into data detail is the danger of “overtargeting,” or unnecessarily limiting your audience through “too much” precision. Strike a healthy balance by beginning with geotargeting, then experimenting by layering in additional data and monitoring results.



Keep looking forward

As consumers become increasingly weary of ads, particularly those that are not contextually relevant, we should see a growing focus on sharing value with the consumer in lieu of an exclusively sales-message approach. Our client Home Depot does this well with their extensive customer “How-To’s.” This boosts sales indirectly, while also building a strong brand connection. As retailers continue to make better and more creative use of apps, with features that utilize in-store “beacons” to unlock elements on a smartphone, deliver targeted promotions, or do things like map the best route through the store for customers to find the item they are looking for, creating and evaluating quality digital campaigns will become easier and more effective.



The strategies available for retailers to enhance digital marketing efforts vary greatly — both in terms of the degree and variety of targeting tactics. While not every strategy will be a fit for your organization, opportunities are there for retailers to better engage audiences digitally. We can further bridge the gap between online and brick-and-mortar shopping experiences for consumers as well as between digital advertising and true business ROI for retailers.

Hyaat Chaudhary is the CEO of Carbon Media Group, the largest producer of digital content for outdoor enthusiasts with a network of 500-plus websites that generate more than 21 million unique visitors each month. He can be reached at [email protected].