How To Accurately Forecast Digital Marketing-Driven Growth
Are you looking forward to achieving business-centric growth online? The manner in which marketing-driven forecasting can help you to achieve the respective marketing objectives can help in defining future opportunities for your business. Around 68% of marketers across the world are using marketing automation for improved results.
Forecasting is the core process of creating specialized, business-centric marketing plans –both for individual campaigns and annual investment.
The creation of highly accurate forecasts based on digital marketing returns for your business serves vital –especially when you wish to ensure ample growth in your digital marketing investment.
Importance of Digital Marketing for Your Business
By going digital, it accounts for the ever-increasing proportion of the total spends as well as the results that your business derives from the respective marketing activities. Digital marketing, as per the experts, is one of the best tools to allow your business to grow.
However, as you build the respective digital marketing strategies for your business, you should implement proper measures to predict as well as track the overall ROI (Return on Investment).
In this post, we will take you through some of the proven ways to accurately forecast the respective digital marketing growth for your business over time. We will also help you unravel the ways to choose the right digital marketing agency for unmatched assistance.
Forecasting Digital Marketing Growth
In recent years, the overall growth of digital marketing has been consistent. It is around 12-14%, and the number only keeps increasing.
While the overall growth is significant, this does not imply that you should invest into the same exorbitantly. You should be careful while analyzing the situation properly to manage the entire system. This is wherein the role of predicting your digital marketing success over time while selecting the right online marketing platforms for your brand comes in.
The Goal of Digital Marketing Growth Forecasts
The ultimate goal of such a strategy is to compare various traffic-oriented channel sources while selecting the one that is going to yield the best results for your business. Some of the important factors to consider are
- CTR (Click Through Rates)
- Target audience
- Source of traffic
- Conversion rate
- Return on ad
- Value per transaction
- Cost Per Transaction
- Number of Transactions
When you put all these factors together, you can come up with a comprehensive digital marketing strategy along with the ability to make informed decisions in the future.
You might ask, “Why is it crucial?” This is because if you are not investing in reliable digital marketing channels that might yield some profit, the chances are that you are losing grounds in the long run.
This holds special meaning to the small business owners who only tend to invest in minimal digital channels. In the given cases, it becomes critical that they are choosing the right channels that would deliver the best results for their businesses.
The Need for Creating Marketing Forecasts
In a given ideal setting, your organization should feature a culture that is able to respect both analytics and data. However, only a few organizations out there are structured in the given manner. Some of the potential benefits of creating a data-driven marketing strategy for your brand while forecasting the same are:
- Improved Justification for Marketing Expenses: Data-centric marketing & forecasting techniques help you create a business case for the overall marketing spend. Evidence-based, professional forecasts can help in determining the impact of promotional activities on the bottom line.
- Improved Influence of the Marketing Department: Emphasis on the total output of marketing (including awareness, generation of inquiries, lead generation, and sales) instead of the inputs (including resources, time, budget, and people) can help in establishing marketing as a major revenue center instead of being a cost-center.
- Strategic Business Advantage: Businesses that are capable of predicting the future properly are in a better position to thrive in the modern competitive era. When you do not forecast, as an organization, your overall growth will be impacted.
This would make your organization unprepared for the future while being vulnerable to a potential attack from the existing competitors.
Ways to Accurately Forecast Digital Marketing Growth for Your Business
As a modern marketer, it is imperative for you to learn how to make use of analytical & data tools for generating forecasts with relevant outcomes. Here are some of the lucrative techniques of forecasting that can help in improving the overall accuracy of your marketing strategies along with budget allocation & planning.
- Determine the Right Source: The first job towards forecasting is to come up with the idea of the incoming traffic source that you wish to analyze. It is imperative to ensure that you will keep repeating this step upon each traffic source you are planning to use.
For instance, you can go for choosing a reliable source like Google Ads paid search, Facebook, email marketing, LinkedIn, and so more. 94% of B2B marketers out there make use of LinkedIn as a part of the digital marketing strategy.
- Predict the Value of the Source: Now that you are aware of the traffic sources and the number of relevant conversions it will bring, you would like to predict the future value that the particular source will be bringing along with itself.
How should you do it? You can run a mathematical equation for the same:
Value =Number of conversions X value of the conversion to the respective business (usually, it is the customer’s lifetime)
You should also determine the value of the given conversion. How do you do that? It is pretty simple. With a bit of math, you can easily analyze the same. To find the value of conversion, you should look into the revenue that every lead will be generating.
For instance, if you are observing a total revenue of around $5000 from 5 leads, the revenue per lead is going to be $1000. If this value is placed into the formula, then you would get: 750 X $1000 = $750,000. This implies that the forecasted value of the given source is $750,000.
- Build the Model: After you have come with a relevant source, you should the number of conversions for the given source.
The model looks like this:
Number of conversions =Size of the audience X CTR (Click Through Rate) X Conversion Rate
- Determine the ROAS: The ROAS (Return On Ad Spend) lets you know your total earning in comparison to how much you are spending on the ad. To analyze the same, you would require another formula:
ROAS =Total revenue spend X amount spent
When you determine this, you will understand how good your overall investment is paying off. It will also help in determining whether or not the source is worth undertaking.
- Compare the Sources: You can now advance to the beginning. You can repeat the process based on the respective marketing sources. Try running the equations and collecting all your information in a document that is centrally documented.
- Start Scaling: Now all the math that you had to do it over. Now, you have to just run the numbers. At the same time, you should also possess a well-informed grasp on the specific channel source that is known for producing the highest returns.
This is a highly productive advertising technique that you would want to focus on. You should also invest in this technique for moving forward.
- Diversify the Sources: You should not aim at allocating all the funds to the top players. You should know that the digital marketing field keeps changing from time to time.
To ensure that you are well prepared for any unforeseen situation, you should aim at diversifying your digital marketing strategy along with the channels that you make use of.
The experts recommend that you should invest in around 3-6 channels. At the same time, you should make a point that you should not allocate over 30 percent of the entire budget into a single channel. Keep the majority of your budget towards the topmost channel.
- Keep Optimizing: In simpler terms, you should ensure continuous optimization of the digital marketing strategies that you are using for the business. When you do so, it will allow you to keep increasing the respective ROAS while bringing the overall costs down.
However, what exactly should be optimized? Almost, everything! Landing pages, testing new ads, conversion funnels, and so more –everything should be optimized.
If you analyze that something is delivering better results than your expectations, the same would translate into improved efficiency & profitability.
The method of forecasting digital marketing strategies for your brand is going to yield profitable results. When you follow the by-the-numbers approach to digital marketing, it can help to yield the desired results.
Try to implement the same on all existing sources. At the same time, you should ensure that you are running the same from time to time to ensure that you remain on the right track at all times.