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Marketers of 2021 and beyond face a unique problem: the pressure to provide a tangible Return on Investment (ROI) for their advertising and marketing programs. In fact, through our research we discovered that the number one challenge facing multi-location marketers today is measuring and proving ROI. It can be extremely difficult to pull together a single picture of ROI when there are so many different factors at stake.

That’s why so many marketers usually resort to one of two options when it comes to their digital advertising. What we most often see is running a national campaign, which ends up being a one-size-fits-all approach. The messaging and targeting aren’t tailored for each individual location. As a result, sales suffer. The other common approach is to leave advertising to the individual locations. With that route, corporate marketers usually give up some of the brand control and ability to see granular performance data at the local level in hopes that the retailer or franchisee will be able to tailor their digital advertising campaign to their market’s unique needs.

Either way you slice it, running campaigns for multiple locations across the country is a complex task!

Netsertive solves this problem by structuring campaigns in a way that gathers all data consistently—across geographical regions and nationally. When you have that data compiled consistently and reliably, only then can you actually use it to determine how effective your campaigns are and whether or not they’re delivering. If you want to see what measuring that ROI looks like ahead of time, check out our free ROI calculator here. Once you have that, you can begin making better decisions on your campaigns to optimize tuning, reduce waste, and maximize your sales profit.

But how do you even get there?

Find a Sustainable & Repeatable Method for Determining ROI

To begin, develop a reliable method for determining ROI. We recommend focusing on profit, not gross revenue, for each location of your business. Don’t default to analyzing metrics like Cost Per Lead (CPL), Cost Per Click (CPC), or Click Through Rate (CTR) by location. While these can help you adjust your advertising, they are ultimately not good for determining actual performance and ROI.

These metrics are inaccurate to painting the picture of your total profits as they vary naturally by market. For example, a high Cost Per Lead in one market could actually be driving the most profit for a company—but the average marketer would have no way of knowing that if they are penalizing any high CPL as being “bad.”

Calculate Return on Ad Spend

Looking at Return on Ad Spend is better than focusing on proxy metrics like CPL, but it still isn’t perfect. However, you can use ROAS for a better picture of how your advertising is working and what you’re getting out of it for your business or brand.

ROAS is easy to calculate. Simply divide the money generated from an ad campaign by the total amount of money spent on that advertising. The return is the actual revenue driven by your advertising spend - or said another way, for every dollar you spend on digital advertising, how many dollars you get back in revenue.

For example, when Netsertive worked with America’s Mattress on a Labor Day campaign , we helped their locations drive $1.1 million in revenue for a 12:1 Return on Ad Spend. That means for every $1 spent on their digital advertising, America’s Mattress made $12 in revenue.

But Focus on the Return on Investment

ROAS is great for getting an idea of how your advertising is working and the next step beyond that is ROI. For this, marketers should think of it with these formulas:

These revenue-level metrics are key to figuring out the real value behind your advertising campaigns. Reliable data is needed to evaluate campaign performance based on the actual profit it drives–not just the revenue. For example, many franchises and retail chains provide co-op or require their franchises to spend a certain amount on local digital advertising to qualify for co-op. Marketers know how much is spent on advertising at the location level, but they don’t have access to the actual return on investment by location. As a result, they're pretty much driving blind. They can't actually attribute sales to the specific location's campaign or channel. True ROI connects the sales to that level of digital attribution, giving marketers a much better view into what’s working and what’s not.

Stay Local with the Data

National brands need to stay local to win. Localized advertising is the best way to reach customers where it matters: when and where they’re shopping, both online and in their communities. To reliably determine ROI, and assess whether your advertising is working the way it should, you need to compile data locally by individual location for your business.

Only when you have this data in your playbook can you begin to make informed decisions and optimize your spend correctly. Without this piece of knowledge, you’re essentially operating in a black box or using incorrect data.

If you need resources or assistance compiling your data, or knowing what to look for as you assess it to determine ROI, you’re not alone. We’re here to help.

Focus on ROI in 2021

Proving ROI is within reach, it just requires you to structure your local, regional, and national campaigns in a standard, ROI-driven structure. To begin calculating your advertising’s Return on Investment, check out our free calculator to see how any revenue-level metrics can impact your bottom line.

Want a free consultation on your advertising? Contact one of our marketing specialists today for more information.

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