How to Analyze your Advertising Spend Smartly?

on HevoIQ • September 29th, 2021 • Write for Hevo

Advertising Spend | Hevo Data

Are you investing in advertising for your brand? If yes, then you probably know the benefits of advertising spend. A paid advertisement is used to drive instant traffic that can turn into sales and leads. Analyzing your campaign performance is crucial to maintain the overall health of your advertising spend. This blog focuses on how you can smartly analyze the performance of your overall advertising spend.

Table of Contents

What is Advertising Spend?

Advertising Spend is the amount of money spend on placing and managing Advertising Campaigns. It can be the money spent on specific Advertising Campaigns or Advertising sets. There are different ways to calculate Advertising spend as some may take into account only the cost for Ads placement, or some may calculate the amount of placement, operational charges, and costs for agencies.

Advertising Spend can be calculated in various ways. A few are listed below:

  • CPM (Cost per thousand impressions)
  • CPC (Cost per click)
  • CPL (Cost per lead)
  • CPA (Cost per action)
  • CPS (Cost per sale)
  • CPI (Cost per install)

How to Calculate Advertising Spend?

Consider the following scenario: you have a specific ad set with a daily budget of $200 and one or more different ads within that ad set. While it is possible that each ad in the ad set spent the same amount of money, this is extremely unlikely. Ad networks will automatically spend more money on the most relevant ads and less money on the least relevant ads unless you specify otherwise. Budget for advertising = $200 Ad 1 is worth $100, Ad 2 is worth $50, Ad 3 is worth $25, Ad 4 is worth $20, and Ad 5 is worth $5.

Ad Spend Formula

ƒ Sum(Ad Spend)

Latest Advertising spend Statistics

 According to the latest data by global Advertising expenditures, the Advertising spend in 2020 reached 586.5 billion U.S. dollars and the forecast data estimates that Advertising spend worldwide will reach 691 billion U.S. dollars by the end of 2023. 

Marketing Spend: The Most Scrutinized Enterprise Spend

When you are paying for a campaign either digitally or traditionally, you will expect instant traffic, which can turn to leads and sales. It is important to analyze your expenditure on marketing products as monitoring budget distribution and ROI (Return of Investment) plays a key role in analyzing the marketing spend. Various metrics which are considered to evaluate effectiveness are as follows:

  1. Traffic Metrics: When you are capable of bringing traffic from clicks, impressions, and engagements, then your campaign is considered successful, and when you are paying for an advertising campaign, then traffic is expected. Analyzing the Click-Through Rate (CTR) is a must by marketers. When out of 1000 people only 10 people click on your ads, then you have only 1% CTR. Low CTRs indicate poor campaign strategies, whereas high CTRs indicate that your campaign was successful in reaching out to the correct audience. 
  2. Conversion Rate Metrics: The rate at which your campaigns are capable of converting visitors to customers, is termed as conversion rate. Strong conversion metrics indicate that your advertisement is reaching the right target audience. These metrics will help marketers to track the correct investment made in campaigns. 
  3. Return of Investment (ROI): The most important part of advertising is getting your desired result. When you have invested in a paid campaign, then expecting huge traffic and a high conversion rate is a must, as these metrics will return your investments. Keeping a track of these two metrics will help you calculate your ROI. 

The marketers collect data in terms of the metrics stated above. Reports are generated on a daily, weekly, and monthly basis to keep track. The final reports are analyzed by the marketers, which helps them to make improvement plans. In the diagram below, you can see a report created for the marketing campaign:

Following methods are currently used by the marketing team to collect data on the advertising campaign:

  1. Currently, spreadsheets are used by the marketing teams to aggregate data from multiple sources. 
  2. Methods like custom scripts, macros, and formulas are used to clean and format the collected data.
  3. Several tools are used by the marketing team to track performance.

Challenges Faced by the Marketing Team

In the digital-driven world, these methods are considered slow and inefficient. Let’s see what are the various problems faced by marketers:

  1. As they are collecting data from multiple sources manually, it can be a tedious process.
  2. Formatting and cleaning of data require tremendous time and effort.
  3. Data obtained from various analyzing tools, such as GA and Mixpanel, are not comprehensive. 
  4. To prepare a detailed marketing report for your running campaigns on multiple platforms manually requires several hours because of data silos.
  5. You have to deal with various data-driven problems, such as data loss and data inconsistency. 

HevoIQ: Integrate and Analyze your Data in Minutes

HevoIQ can connect with multiple ranges of marketing applications and pull data easily. It can automate your data flow in minutes and can be easily visualized in various BI tools such as Google Data Studio, Power BI, Tableau, etc.

Let’s discuss some of the benefits of HevoIQ:

  1. Fully Automated: HevoIQ can be set-up in minutes and requires zero maintenance.
  2. Real-Time: HevoIQ can provide access to the most accurate and real-time data without any coding.
  3. Historical Data Load: HevoIQ can automatically pull your historical data, which can be analyzed easily.
  4. Live Support: HevoIQ team is available round the clock to provide exceptional support to you through chat, email, and call.
  5. Secure: HevoIQ offers two-factor authentication and end-to-end encryption to make sure that your data is secure.
  6. 100+ data sources: HevoIQ supports pre-built integrations from 100+ data sources.

Give HevoIQ a try by signing up for a 14-day free trial today.

Who is a Chief Marketing Officer?

A Chief Marketing Officer prioritizes the growth of the sales in the company by making a comprehensive marketing strategy. One such marketing strategy that can be used to bring more sales for the company is customer-centric campaigns. They put themselves in the shoes of the customers and devise plans accordingly. So, all the campaigns which are running or will come into play, are used as a staircase by the CMO for bringing more sales to the company. CMO also makes sure that there is an improved customer experience by providing a cohesive multi-channel with a view of an omnichannel.  

Let’s discuss the various things a CMO wants:

  1. A CMO wants to meet customer expectations. To keep the product up to the mark, you need to keep innovating it. 
  2. A CMO wants to create an omnichannel experience. An omnichannel experience refers to a multi-channel approach for marketing, selling, and serving the customers. It helps in integrating customer experience. 
  3. The marketing team should adopt the right technology. As we know, agility is vital, so marketing keeps getting better with time. 
  4. According to Martec’s Law, technology changes exponentially, whereas organizations change logarithmically. To sustain the growing technology, the organization needs to adapt to the technology simultaneously. 
  5. Factors, such as digital transformation, data security, organizational changes, etc, put pressure on the team and budget. Keeping track of ROI will help them improve their expenses. Money spent on marketing is an investment. A CMO wants to invest more in customer communications to know customer needs. They prefer using KPI, which offers to align spending.  
  6. Analyzing all your investments, CTR, impressions, etc, and making a dashboard for a quick overview will help you devise a new plan. It will help them to reach out to the customers and get a better understanding of their needs. An example dashboard for a CMO can be seen here:

How to Analyze the Performance Across all the Advertising Platforms?

When you are analyzing the performance of your advertising campaign, then you should consider your traffic metrics, conversion rate metrics, and your ROI. These three metrics play an important role in determining the effectiveness of your campaign on different platforms such as Google, Facebook, Twitter, etc. Let’s go through the process of analyzing your performance:

  1. Identify your Goal for Campaign and Advertising: Whenever you are advertising, you should identify your goal, whether you want to create brand awareness or you want more conversions of visitors to customers. Building an advertising campaign with a clear goal will give customers a clear picture of your product.
  2. Identify your Key Metrics from the Advertisements: If you are advertising for brand awareness, then focus on traffic metrics, whereas if you want to increase the number of your customers, then focus more on conversion metrics. 
  3. Keep a Track of your Conversion Rate: Keep a daily/weekly/monthly track of conversions, conversion rates, and cost per conversion. It will help you evaluate your ROI.
  4. Evaluate and Analyse Performance: After you have collected your data, you can prepare reports from the data from different platforms. It will help you analyze your performance. 

Whenever you are advertising on platforms such as Google, Facebook, Bing, you expect ROI. So, investing more in one platform and getting poor results will cause drop-in sales. If you analyze your performance on all these platforms, you will be able to keep track, and hence, climb the stairway to success. Integrating the performance of campaigns on different platforms will provide you a clear picture of your ROI.

How to Integrate Data Across Different Advertising Platforms?

Data integration across different advertising platforms can be done in a few simple steps with the help of HevoIQ. The integrated data can be used to analyze the performance of your overall advertising spend. Let’s discuss the steps required to achieve data integration on HevoIQ:

Step 1: Connect: Connect your sales and marketing data sources with HevoIQ just by providing the credentials.
Step 2: Integrate: Integrate your data from multiple sources, store it in our fully-managed data storage, and make it analytics-ready. 
Step 3: Analyze: Connect and visualize your unified data in your preferred BI tool and derive actionable insights in minutes.

HevoIQ provides various benefits as stated below:

  1. It provides a single source of truth for your marketing data.
  2. It provides access to the most accurate and real-time data without any coding.
  3. Now you can focus more on insights, not on data preparation.
  4. You will have more time for doing research, identifying opportunities, and new customer acquisition.
  5. It will help you improve sales, retain customers, and increase profitability.

What is KPI Dashboard for Overall Advertising Spend?

A KPI dashboard is a single board containing information about the metrics which you are using to track your progress. It can be an individual KPI or a company goal. Let’s discuss the different ways to create a KPI dashboard:

  1. Using Spreadsheets: The data present in your spreadsheet can be visualized by making a dashboard using the charts and graphs in spreadsheets. If there is any update in the data, you have to manually update it on your dashboard.
  2. Using Presentation: The dashboard can be created using the charts and bars available on the presentation platform. All the changes are done manually, as this platform can’t show changes in real-time. 
  3. Using a Data Visualization Tool: It is the most popular method for creating a KPI dashboard, as it supports changes in real-time. You don’t have to update your dashboard manually.

Let’s see what needs to be taken care of while designing your KPI dashboard:

  1. It should be on a single page or screen. A KPI dashboard is a quick overview of your progress. It should help you identify any issues immediately. Keep it less detailed.
  2. Your dashboard should be easy to understand. It should be easy for the reader to get an insight into the data and navigate accordingly. Try to arrange data logically.
  3. You should include the necessary KPIs. Display only the information that can be viewed on a single page and depicts the entire story. 

What are the Benefits of Automating the Process of Data Integration and Reporting?

Before understanding the benefits of automating the process of data integration and reporting, let’s first discuss the challenges of data integration using the manual method:

  1. You have to manage multiple data sources manually. It is a tedious job.
  2. It takes a lot of time to clean and format data.
  3. The data available in analytics tools like GA and Mixpanel are not comprehensive. 
  4. You have to prepare detailed marketing performance reports for campaigns running on multiple platforms that take several hours because of data silos.
  5. You have to deal with data loss and data inconsistency.

If you automate your data integration process you will be  benefited from the following:

  1. Data Silos will not be a problem.
  2. You will be able to focus on insights, not on data preparation.
  3. You will have more time for doing research, identifying opportunities, and acquiring a new customer.
  4. It improves sales, retain customers, and increase profitability.

Conclusion

In this blog, you have learned how to analyze the performance of your overall advertising spend. You have also learned about the marketing spend, priorities of a CMO, KPI dashboard, and how to integrate and analyze your advertising spend on various platforms.

Data integration is a key component in analyzing the performance of your overall advertising spend. HevoIQ supports pre-built data integrations from 100+ marketing data sources at a reasonable price. With the help of HevoIQ, it becomes a cakewalk to analyze your overall advertising spend.

Give HevoIQ a try by signing up for a 14-day free trial today.

Share your experience of integrating and analyzing the performance of your overall advertising spend in the comment section below.

Integrate and Analyze your Marketing Data Easily