As a marketer, collecting and analyzing data is your way of understanding what your audience wants and needs so you can tailor campaigns to them going forward.
The data that automatically comes up in your dashboard, however, doesn’t always mean what you think. For example, you might see that you’ve earned thousands of clicks on a blog article and automatically assume that it’s your top-performing post, but would you still consider it a top-performing article if the bounce rate was incredibly high and people only spent an average of five seconds on the page?
Getting the data you need isn’t always as simple as looking at your analytics tool’s dashboard presets; in fact, sometimes that information can actually be misleading! Here are three marketing data myths debunked by Wicked Reports Founder and CEO Scott Desgrosseilliers:
Data Myth 1: Cost Per Click Determines the Effectiveness of Your Ad Campaigns
Whether you’re running ads on Facebook, Google, LinkedIn or anywhere else online, it’s essential to know the metrics that determine if a campaign is a success or failure. Use the wrong data and you risk pouring money into ads targeting an ineffective audience without even knowing it.
Lower Cost Upfront Isn’t Always Better
Let’s say you’ve been running two ad campaigns for over a month — one running at $3.50 cost per click (CPC) and the other at $1. You check in on them daily and are growing to favor the $1 CPC ad for obvious reasons; you’re spending less than a third of the money on clicks for this campaign.
It’s been a month with these same consistent results, so you stop the more costly ad. The next day, you notice that something horrifying has happened: Your sales came to a screeching halt. This can’t be possible, right? Unless you were looking at the wrong data to begin with.
Dig Deeper: Look at Your Ad ROI
Once the initial shock of halted sales wears off, you pull up all the numbers to compare the two ad sets in more depth. Here’s what you find:
After looking at just a few more numbers, you already see a difference. The seemingly more expensive ad was actually bringing in more leads — at nearly half the cost per lead. So you decide to dig deeper. Did they turn into customers?
Come to find out, the $3.50 CPC ad not only brought in a higher number of quality leads, but also converted those leads into much higher paying customers than the $1 one, resulting in more revenue coming from the ad you’d once pinned as a failure.
Suddenly it all makes sense: The number you should have been calculating all along was return on investment (ROI). Here’s how to calculate it:
It’s a Date
Why is ROI the magic number? Marketing tracking expert Scott Desgrosseilliers says, “Think about dating. If you’re trying to get married, cost per click is evaluating how much it cost you to take her to dinner. But the ROI is, “Did you fall in love or get married?”’
The answer is in the context: If your goal is to close more sales and generate more revenue, then your ROI can’t be calculated by simply counting how many people clicked on your ad — it just wouldn’t make sense.
Data Myth 2: If the Open Rate Is Good, Your Email Campaign Is a Success
While a high email open rate is a good sign, it’s not a definitive answer for whether your email was a success or failure. Think about your own inbox: How many emails do you open up just to clear your notifications?
It’s Not About How Many People Open It; It’s About What They do After
Scott Desgrosseilliers says, “Open rates are an inaccurate metric because they trick you into worrying about the wrong thing: how to get people to open email instead of whether they actually bought anything.”
For example, let’s say you send a promotional email every week to 1,000 subscribers on the same day at the same time. Your average open rate is 12%, but in the first week of April, you changed up your copy and noticed that 20% of your subscribers opened it. This email must be better, right? Not necessarily.
It all goes back to your business goal. Ask yourself the following questions:
1) Why am I sending out emails in the first place?
2) What do I hope to gain from them?
3) If I don’t achieve that goal with these emails, are they still a success?
Chances are, your ultimate goal is to generate sales and revenue from your email marketing campaigns. If that’s the case, there’s a whole different set of numbers that determine whether your campaign is a success or failure.
It’s All About Revenue Per Email
Open rates and sales generated from emails don’t always go hand-in-hand. In fact, it’s completely possible to get a low number of opens, but those who do read your message are compelled to buy. There’s no way to know unless you dig into the numbers for revenue per email.
In order to accurately calculate revenue per email, set up tracked links and use last click to determine whether or not a reader bought after clicking on a link within the email. Scott compares this to window shopping versus making an actual purchase. He says, “The number of people who look in through your window [open rate] is useless. It’s sales that tell you what’s working.”
Data Myth 3: Last-Click Attribution Tells You Your Ad’s ROI
Unlike emails, the success or failure of ad campaigns shouldn’t be determined with last click attribution. Ads are placed to grab your audience’s attention and compel them to opt in or make a purchase but, depending on how long your sales cycle is, they might not buy right away.
Just as in other parts of your business, it comes down to the “why.” The point of running ad campaigns over time is to find the ones that bring in the highest quality leads and customers — the ones that convince viewers to fork over their contact information or money. Scott says, “Last click is not built to answer the question, ‘Where did I find my best customers?’ It simply tells you their last move before purchasing — which is good to know but for other reasons.
The Real Source of Your Ad ROI
Knowing your leads’ path before becoming top customers is valuable information if you want to duplicate those results over and over. That’s why first click is the real source of your ad ROI. Scott says knowing which ad a high-spending customer came from is “valuable information, because you know what type of offer, to what audience, attracted them in the first place.”
Once you have that information figured out and have given the ads time to gain traction, Scott says you can begin to “focus your money where the good leads are generated and stop wasting money where the bad leads come from.”