How to Gauge the ROI of Your Paid Traffic Channels

This post originally appeared in Outbrain’s blog on March 19, 2012. Since it’s still relevant in the context of today’s changing media landscape, I thought I’d repost it here now.

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With average click-through rates on traditional online advertising, such as banner ads, falling to 0.09%, it’s clear that capturing the attention of online audiences is increasingly difficult.

Jakob Nielsen and Kara Pernice’s research in “Eyetracking Web Usability” found that audiences’ eyes naturally gravitate towards the content on web pages versus the media running adjacent to the content. The heatmap below highlights users’ viewing patterns on the following three types of webpages:

– an article in the “about us” section of a corporate website (far left),
– a product page on an e-commerce site (center), and
– a search engine results page (SERP; far right).

Eyetracking Web Usability

What does this tell us? That content matters. Quality content is valuable to your audience and helps drive deeper engagement with them – more so than with traditional advertising.

So how do you take advantage of quality content to engage your potential consumers? Here is a step-by-step approach on how to get started: define your business objectives, develop a solid content strategy, give your content a paid media boost and measure ROI of your efforts.

Define Business Objectives

First, you must define your business objectives. Note, that we say “business objectives”; not “marketing objectives”.

Paid media is often measured by the number of impressions delivered, and the CTR (click-through rate) achieved on those impressions. But, as discussed above, industry average CTR is only 0.09%. This means that for every 1,000 impressions served, only one person, on average, is clicking on that advertisement. Fewer are staying on, or engaging with, the pages those advertisements are driving to. Furthermore, a recent comScore study found that one third of reported ad impressions are never actually seen. So, traditional means of measuring ROI aren’t very effective — or, even, accurate.

Instead, it’s best to align your marketing objectives with your actual business objectives. For example, do you want to…

– Generate new sales leads?
– Showcase your company’s industry leadership?
– Educate existing clients about new products/services?

Develop a Content Strategy

Once you define your business objectives, you must identify your audience’s consumption habits.

– Are they trusting referrals from friends in their social networks? If so, which ones (e.g. Facebook, LinkedIn, Twitter)?
– Are they searching for information on Google? If so, what keywords and terms are they searching for related to your business?
– What kind of content do they enjoy consuming (video, text, photos, presentations), and where do they consume it (social networks, blogs, etc.)?

Armed with this information, you can then develop a strategic content plan to engage your target audience. Produce quality, engaging content incorporating the keywords and terms that your audience notices and searches for. This will improve your SEO (“search engine optimization” or organic search results). As shown in the heatmap above, this is where people’s eyes gravitate when searching online.

Creating content that your target audience values will also improve the quality of people (or sales leads) landing on your content and the duration of their engagement with your brand.

Paid Media

So, where does paid media come in?

As Forrester’s Sean Corcoran describes in Defining Earned, Owned And Paid Media, “no other type of media can guarantee the immediacy and scale that paid media can. However, paid media is shifting away from the foundation and evolving into a catalyst that is needed at key periods to drive more engagement.”

Corcoran is describing a tectonic shift from paid media being the foundation of a marketing strategy to contentbeing the foundation of a marketing strategy.

Paid media can serve to launch that content to a scaled audience, targeting the websites where your consumers live online. Quality content, distributed at scale, and leveraging social media can help to optimize your cost of marketing.

Measure ROI

Having produced content that your consumers value, and distributing that content through the channels in which your audiences live, you should see an improved quality of audience, and engagement and retention rate over time. At the same time, you should find that the aggregate cost of paid media should decrease because your earned media is creating a viral lift of your content. Your effective CPC (cost per click) should go down. And, finally, if you have aligned your marketing goals to your business goals, you should find that the latter are being met.

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