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In the ever-evolving world of digital marketing, we all want to make sure our dollars are being spent wisely. I recently had a fascinating discussion with John Moran, a brilliant mind from Solutions8, that shifted my perspective on how to evaluate ad spend.
John's viewpoint hinges on focusing on two key metrics: topline growth and omni-channel spend.
Calculating Topline Growth
Topline growth can be calculated simply by multiplying the Average Order Value (AOV) with the Purchase Frequency. This gives us the 'Customer Value.'
Understanding Omni-Channel Spend
Omni-channel spend encompasses all expenses across various channels, from Google to Facebook and everything in between.
The Attribution Dilemma
One of John's keen insights was around the difficulty of attribution in our digital era. Attribution has become a complex and controversial issue, often manipulated and misunderstood. Every channel wants to claim credit for a sale, but in reality, we operate in a multi-channel world.
A consumer might see an ad on Facebook, Google the product later, and eventually make a purchase from your site. In this workflow, who should get the attribution? Facebook, for initial exposure? Google, for driving research? Or should no one get the credit since the customer's journey spanned multiple touchpoints?
The Real Measure of Success
According to John, the truth is, in the grand scheme of things, it doesn’t matter. His perspective is refreshingly straightforward: instead of getting caught up in the attribution game, focus on the numbers. If your Customer Value is increasing, then you're doing something right!
This conversation was a great reminder that it's essential to look beyond the surface and question conventional wisdom. In this multi-channel world, considering the bigger picture, focusing on topline growth and taking a holistic view of channel spend can lead to a more effective ad strategy.
Stay tuned for more insights and thought-provoking conversations!
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