Developing an Online Marketing Strategy Using A Challenge Grid, Part 2

Earlier this week, in Part 1 of this post, we explored the possible challenges of setting up, ramping up and maintaining six of the most common online marketing strategies as reported by marketers. In Part 2, we’ll dive into potential returns.

As with the difficulty scores, each strategy is being ranked on scale of 1-5 in three categories: Engagement Rate, Conversion Rate, and ROI (more on these below). Then each of those three scores is averaged, giving us the Potential Return Score.

At the end of the article you’ll find the six strategies ranked according to their potential return scores in the complete Challenge Grid. This also incorporates each strategy’s challenge score, so you can see them all in one nice little chart. Don’t agree with my scores? Shout out in the comments.

Potential Return Scores Explained

First, a word about these numbers. They all assume a fairly high level of optimization within each marketing strategy. A basic Facebook page that hasn’t been updated in 6 months isn’t going to drive engagement or ROI like one that posts unique offers once a week, and I’m assuming you’re closer to the latter.

Engagement Rate: I’m thinking here about total possible reach for each channel, as well as how engaged users typically are with content they encounter. For example, 44% of Twitter users have never sent a tweet.1  This means that the potential engagement for that channel isn’t as strong as it could be.

Conversion Rate: Related to engagement, this number relates to how likely it is that a user in this channel would take a desired action, be that making a purchase or signing up for a newsletter, after encountering a marketing campaign. For example, 90% of the users on LinkedIn make household decisions1, so even though the engagement possibilities might not be as high there, the conversion rate could be really solid.

ROI: Much of this comes from the ExactTarget report I referenced earlier.2 They’ve already polled marketers about their ROI in various channels, so I’m pulling heavily from that data along with my own experience.

And now, the numbers.

Potential Return Scores for the Top 6 Online Marketing Strategies

Email Marketing

roi email marketing

According to ConvinceandConvert.com, “people who buy products marketed through email spend 138% more than people that do not receive email offers.” That’s an interesting statistic, and I think most marketers see this type of engagement reflected in our own email marketing campaigns. When they trust your content and your brand, users are willing to engage with your emails.

This engagement plays into the high potential for conversions and ROI noted above. These high numbers offset its relatively high difficulty score (3.67/5), giving it the second highest potential return score of all the strategies we’re considering.

YouTube Marketing

roi youtube marketing

YouTube has 1 billion users, and they watch over 6 billion hours of video per month. 6 billion hours is a lot of time to engage with customers, hence the 5 score for engagement.

Conversions, on the other hand, are a little harder to come by. 100 hours of video are uploaded to YouTube every minute, meaning that there is a lot of noise out there to compete with. Making money off advertising within and around your videos probably isn’t your best bet, as many users have reported that YouTube takes 45% of that revenue (link to source).

But if you can build a following around useful content you’re likely to see some good returns on the time it took you to create the videos and get people to watch them.

Additionally, YouTube has an extremely broad demographic reach: 70% of millennials, 58% of Generation X, and 49% of younger baby boomers visit it at least monthly. Nielsen has reported that YouTube now reaches more adults in the United States between the ages of 18 and 34 than any cable network, and it’s available in 61 languages. Chances are, your audience is on YouTube somewhere (link to source).

FaceBook

roi facebook marketing

Facebook is in an interesting position right now, because it has a huge global reach (1.35 billion active monthly users), but it’s just old enough that people are getting a little jaded about it. 45% of internet users over 65 use Facebook, which tells us a lot about how younger users are probably feeling about it.

Advertising on Facebook can still bring in returns (the average ROI for a retail advertiser is $152), but organic engagement is getting harder to achieve. If you can craft a Facebook marketing campaign that provides value and useful content you can still get followers, and you can get them to take action. Once you get over that hurdle conversion and ROI are still going strong.

Twitter

roi twitter marketing

Twitter is probably the least effective of all the major social media marketing opportunities right now. Just 57% of marketers say they currently use it, compared to 89% on Facebook, 72% on YouTube and 75% on LinkedIn (Source: ExactTarget Survey)

This is no doubt a reflection of the relatively low engagement with marketing messages on Twitter. Its message length restrictions can make it much harder to easily get your message across, and even if you’re a master at the 140 character genre, only 16% of US adults are on Twitter to begin with.

However, there are some demographics you can reach with a tweet. 45% of all Twitter users are between the ages of 18 and 29, and 40% of the users have a bachelors degree. If you have some targeted personas that frequent Twitter the ROI can be strong, but overall the potential return is fairly low.

LinkedIn

roi linkedin marketing

LinkedIn is a valuable piece of the social media marketing equation because it can reach an audience that isn’t otherwise available with SMM campaigns. 13% of LinkedIn users don’t have a Facebook account, 83% don’t visit Pinterest, and 59% don’t use Twitter. This somewhat untapped audience is what’s driving its high potential for ROI.

There’s also good potential for engagement with the LinkedIn community, as many people are actively looking for good business-related content during their time on the site. If you have B2B needs, this is a good place to have those conversations. Whether or not they will convert into a sale or other marketing-related outcome is not certain. LinkedIn tends to be most successful at the long game, giving it a low score for conversion rate.

SEO/SEM

roi on seo

Finally, there’s our old friend search engine optimization, now more commonly called search engine marketing or SEO marketing. This can cover a lot of territory, but what I’m considering is just onsite SEO: metadata, URL structure, keyword density, and the basic good stuff that Google is always going to look at when ranking sites.

Certainly these are not the magic bullets they might once have been, but I’m giving SEO marketing such high scores because without them you can’t reach your full online marketing potential. All the other online marketing strategies presume that you’re meeting a minimum level of functionality and pleasantness on your main website.

Basic search engine optimization will help you meet that minimum, which will in turn provide dividends in the form of increased organic search traffic and better conversion rates on all your other online efforts.

Bottom line: getting your SEO marketing together can pay big dividends.

Putting it All Together: What Online Marketing Strategies Drive ROI?

As a reminder, here are the three primary success metrics driving online marketing efforts in 2014:

  1. Conversion Rate

  2. Engagement Rate

  3. ROI

And here is the complete Difficulty/ROI comparison chart pulling together everything we’ve talked about, with each strategy ranked by their average potential return score:

Challenge Grid:

table header

SEO/SEM

3

1

1

1.67

5

5

5

5

Email Marketing

5

3

3

3.67

4

5

5

4.67

YouTube

5

4

3

4

5

3

4

4

Facebook

1

2

2

1.67

3

4

4

3.67

LinkedIn

2

2

2.5

2.17

4

2

4

3.33

Twitter

1

3

3

2.5

2

1

3

2

Again, this is as much of a data-driven analysis as I could make it, but I would love to hear from my fellow marketers! Do you agree with my rankings?


Sources:

1. ExpandedRamblings, 150+ Amazing Twitter Stats
2. SalesForce ExactTarget Marketing Cloud 2014 State of Marketing Report

 

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Andrea Fryrear
About the Author:

Andrea Fryrear

Andrea loves to dissect marketing buzzwords and fads looking for the pearls of wisdom at their cores. Her favorite topic is agile marketing, which she believes holds the key to a more fulfilling (and less stressful) marketing career for individuals and a more powerful marketing department for business. When not scrutinizing the latest agile methodologies, Andrea can be found on the volleyball court, at the park with her two delightful kids, or baking “calorie-free” cookies. Connect with her on Twitter @AndreaFryrear, or on LinkedIn.




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