Marketo-DG2DA
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PART IX: MEASUREMENT<br />
METRICS<br />
Back End Metrics<br />
Back end metrics are generally more<br />
complex than the front end metrics<br />
because they track your<br />
advertisement’s impact on revenue.<br />
Often back end metrics are tracked<br />
with the help of a marketing<br />
automation platform, which enables<br />
marketers to take the front end<br />
metrics and track that activity all the<br />
way through the customer lifecycle<br />
to determine ROI.<br />
Marketing automation allows<br />
marketers to directly connect their<br />
advertising activity and data to their<br />
marketing automation platform. This<br />
connection enables marketers to<br />
effectively track customers from<br />
awareness to engagement with your<br />
advertisement all the way through<br />
the sales funnel—from MQL and SQL<br />
to pipeline and ultimately, revenue.<br />
These metrics are important to<br />
understand at both a digital<br />
advertising program level and for the<br />
individual advertising platforms.<br />
This section goes into more detail on<br />
what back end metrics you should<br />
be tracking.<br />
Return on Investment (ROI) and<br />
Return on Ad Spend (ROAS):<br />
Return on investment (ROI) and<br />
return on ad spend (ROAS) are<br />
essentially the same metric despite<br />
the difference in terminology (this is<br />
based on whether you are a B2B<br />
(ROI) or B2C (ROAS) organization.)<br />
These metrics measure how much<br />
your advertising campaign generates<br />
compared to the cost of running the<br />
campaign. Essentially it’s the go-to<br />
metric to measure effectiveness.<br />
It’s usually shown as a percentage.<br />
This simple measurement helps<br />
advertisers calculate and adjust<br />
their advertising in real-time, and in<br />
the case of programmatic<br />
advertising, this metric is used to<br />
help optimize bids.<br />
Pipeline Created: With First Touch<br />
and Multi Touch Attribution<br />
To become more strategic about<br />
measuring financial metrics from<br />
digital advertising, start by<br />
recognizing that your buyer rarely<br />
makes a purchase as a result of a<br />
single campaign.<br />
Conventional marketing wisdom<br />
proposes that at least seven<br />
successful cross-channel touches<br />
(forms of engagement) are needed<br />
in order to convert a cold prospect<br />
into a buyer.<br />
Sometimes companies attempt to tie<br />
revenue to either a customer’s first<br />
touch or his last. But, it’s important to<br />
determine which strategy works best<br />
for your organization. We’ll cover the<br />
different attribution strategies in the<br />
next section.<br />
Lifetime Value of a Customer (LCV)<br />
The lifetime value of a customer is a<br />
prediction of the new profit attributed<br />
to the entire future relationship with<br />
the customer. In businesses where<br />
the customer lifecycle is cyclical, with<br />
repeat purchases, advocacy, and<br />
referrals as a large part of revenue,<br />
the LCV of customers coming in<br />
from different advertising programs is<br />
an important part of proving your<br />
digital advertising’s value.<br />
The formula is:<br />
Revenue – Cost/Cost<br />
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