It takes a lot of what ‘not to do’ before you are able to shape an idea of what you need ‘to do’.

I have been there witnessing how the digital marketers started back in time with just couple of us sitting in the corner with no idea what we do and often treated as internet geeks.

Now digital marketing has become one of the core foundations of the business. It is becoming the department that can drive ROI and has huge ability to shape the business with real-time statics. Yet, it is becoming more and more complicated and the biggest headache for CEOs.

Technically, if money cannot buy happiness then money cannot buy the best digital marketing achievements or teams.

1. Starting with the function of digital marketing

Commonly known as the most critical loop that leads nowhere. CEOs expect direct ROI profitability and growth hacking charts rising up while digital marketers believe that their role is more revolutionary inside the organization.

So what is the bottom line for this debate? Both parties are right, I would say. There are many functions your digital marketing can drive inside your organization and there is no ultimate recipe for that. Digital marketing function will be always built according to the company’s strategic business objectives.

The role of the department should serve the core values and client relationship as well as driving ROI. Looking at digital marketing function as acquisition factory will turn it into another sales representative which is a narrow view of the picture.

In a world dominated by the internet and online communication, digital marketing can affect and functionally drive value to the brand awareness, sales quality, customer relation, retention, product development and even HR.

The conclusion: Digital marketing can bring value to the organization when it is positioned to serve the strategic business objective. Startups do understand this and that’s why they rely on digital marketing to serve the overall business objective.

2. Then what are the capabilities?

Digital marketing is hugely powerful but it is not a straightforward machine to feed with money and expect the profit on the other end.

Let’s forget the magic and try to imagine digital marketing capabilities as the financial assets for investors. There will be long-term profitable assets and short-term ones. If you expect to sell the long-term profitable assets immediately, you will end up with zero profit.

Digital marketing is not all in one tactic to acquire clients that have the same lifetime value. You cannot simply put inbound marketing, content with paid channels in one basket and expect the same results from all.

Scenario #1 “The CEO is again shouting when he is looking at our budget and conversion. These will the 3rd time after one thousand for me to go on mission impossible of explaining how each channel has it is a different function. He wants to see the relation, pushing for the language of numbers and the direct impact on conversion. A few months more till the results started to build up and visible trend finally arrived. The inbound marketing was something hard to push on with the limitation of the budget he forced but it finally paid off. Now he gets the picture of the long-term tactics such as content”

3. Considering technology with the market environment

In digital we are growing massively. Machine learning, digital clouds, automation, and programmatic are taking us to a great level of targeting and monitoring. Yet, the online market environment is getting more and more competitive. From SEO, social media to search bidding and Ad placement we are struggling with more and more challenging space for converting the value conversions. Or in business: “The ROI”.

In the old golden days of marketing, the size of the company and market share used to play a big role while now small startups with gorilla marketing joined the game. The competition is getting wider and highly competitive and doesn’t rely only on your budget size or the USPs of your product. One smart social media strategy designed by a small startup can go viral and beat the big firm massive paid campaigns.

4. What about the consumer?

Along with the big flood of online content, communication, and technology, the consumer habits and behavior are evolving to be more complicated. With all the current competition going on the consumer keep developing different habits online. The data analysts in marketing teams are solely focused on finding the patterns and we all know by now that it is getting how challenging it is.

With the use of advanced analytic tools, CRM, marketing clouds, attribution models, social listening and campaign management platforms, we can learn have advanced knowledge and deeper insights of the consumer, but we also eventually learn how it is important to develop more of strategic funnel journey.

5. Setting the KPIs

Getting to the most important part where we need to define the KPIs for the digital marketing department. The majority of KPIs should be optimized to serve the business strategy. There are several factors you should consider when setting up the KPIs metrics

  1. The department functions inside the organization: For companies with branding objectives they use upper funnel metrics while companies who are customer focused they use social listening and social proof metrics.
  2. The direction of business: KPIs should be always clear for the digital team and doesn’t have a conflict or overlap with other internal departments or process.
  3. The reliability and stability: Chasing everything would lead to nothing. If the KPI focus is stable and not swinging this would help the team to be more strategic and focused.

6. Searching for the ROI

Businesses usually have a different formula to calculate ROI which I believe it is the trickiest task. While it is important for a manager to secure their results and to manage the budget, marketers are always struggling to prove their efficiency.

Over the years, I started to develop the idea that ROI is not one straightforward term. It is can be divided into three types:

A) The initial ROI: It is the rate you need to target so the digital marketing campaign starts to be profitable.
b) The maintained ROI: The rate the where you should plan to protect and stabilize
c) The future ROI: The strategic ROI where the digital marketing strategy should build up gradually.

Yes, we might have different types of ROI according to our strategy but we all know that calculating ROI is a very tricky thing when it comes to the digital world.

  1. You need attribution model to be able to understand the different impact of channels
  2. Each business will require a different approach to cross channels/cross-device journey
  3. The funnel is always different. You might have a shorter funnel in e-commerce and long funnel in business services
  4. ROI channels in B2B is different from B2C channels

I will leave you with the below statistics to have some more insights.

So what?

Conclusion: Let’s finalize some final points:

  • Defining the digital marketing function inside the organization is the first thing that should be done right and clear.
  • Digital department capabilities should be measured with a strategic metrics
  • Marketing technology is a part of the whole environment.
  • The consumer journey is a rollercoaster with common patterns to define.
  • KPIs is not few metrics to measure. It is how you define your digital marketing functions and outcomes.
  • There is no one road or straightforward formula to calculate your digital marketing ROI

That was my thoughts. If you have any points to discuss, please leave your comment or contact me.

Published by Yasser Ahmad

Yasser Ahmad is an independent digital marketing consultant and marketing strategist with a Master's degree in Data Analytics & Marketing. Yasser is a certified member of the CIM and holds and has over 16 years of experience in managing marketing strategies and consulting brands in EMEA, USA, and APAC. Specialized in Marketing Analytics, MarTech, Growth Hacking, Automation, and Performance Marketing.

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