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I worked in ecommerce for 10 years and got to know the quantitative marketing folks well. All marketing campaigns were tracked and analyzed weekly based on the
by chwolfe 7y ago
I worked in ecommerce for 10 years and got to know the quantitative marketing folks well. All marketing campaigns were tracked and analyzed weekly based on the concept of "marketing income". Marketing income at the order level was defined as: Marketing Income$ = Order Total$ - Cost of Goods$ - Shipping$ - Marketing Expense$.
- shishy 7y agoThis might be a dumb question, but how did they know that marketing expenses drove more orders (rather than just eating into their margins)?
- chwolfe 7y agoGood question! Combination of holdout groups (split testing) based on historical keyword traffic/conversion and tagging paid and natural search entries to compare cannibalization across campaigns.
- nikisweeting 7y agoGood data-driven marketing teams work hard to establish control groups and known baselines before starting high-spend campaigns, and the ROI of those can be quantified by referrer info if they're highly specific and keyword-related. As for more general campaigns, in my experience, it's a crapshoot, if the numbers go up everyone is happy whether or not marketing was responsible for the majority of it. I'm sure other companies have better approaches than that though.