The days of looking at online campaigns purely in terms of immediate conversion rates have gone forever, writes Andrew Hood.
Typically, digital marketing involves a build-up of contact over a research-buy cycle, particularly in markets like financial services and travel where consumers are inclined to shop around.
Working from that basis, we have to look at the sequence of marketing events that drive conversions online and look at the interactions and reactions between digital channels to get a clear sense of the real impact of our campaigns and channels.
Growth in online marketing has arguably been fuelled by the ability to quickly quantify return on investment, tracking the sales generated by any given campaign and benchmarking performance by conversion rates.
However, companies engaging with their customers online across a mix of search engines, email, banner and affiliate marketing need to understand how they work together to drive sales.
Two important elements to understanding impact are the research-buy cycle for consumers and the power of brand recognition in generating and capturing interest.
When customers shop around for a product online, they will often interact with multiple channels.
Indeed, recent Lynchpin research showed that 70% of travel buyers didn't transact on their first visit.
Equally, research into a product can often translate into interest, or loyalty to a brand, with product campaigns feeding into brand campaigns and vice versa.
Traditional return on investment (ROI) reporting gives all the credit to the final marketing action prior to transaction.
But the online marketing mix is exactly that: a mix. When the impact of actions earlier in the research-buy cycle are ignored, value can be wrongly biased towards the last link in the chain.
Additionally, offline campaigns can have a real impact too, with evidence of direct mail being a big driver of search engine conversions in the catalogue market. Pull the direct mail, and search suffers.
Making sense of all these interactions can be achieved at two levels. Online sales can be linked back to all the marketing actions leading up to them and the value apportioned between those actions for return on investment calculation purposes.
Looking at offline and online reactions, simple cause and effect observations such as spikes in search engine traffic or uplift in conversion rates corresponding to direct mail drops or TV campaigns give a clear sense of the impact of individual actions.
Measuring impact and exploiting campaign synergies is key to maximising return on investment in a competitive online marketplace occupied by increasingly savvy consumers.
Getting the right mix of product, service and brand to drive sales is vital and digital marketing campaigns can no longer be viewed in isolation.
Tracking, research and planning must evolve in levels of sophistication and complexity to meet the ever increasing demands of multi-channel marketing.
Andrew Hood is the managing director of Lynchpin Analytics.