Many businesses hire an Internet advertising agency to run their online marketing campaigns but fail to get positive ROI, why is that?


Advertising is one of the ways to get traction, but for most brands it takes over 6 months (or a year) to build any income at all. It's a good way to promote local stores or coffee shops, and cheaper products, but the cost per click is high for online products and the initial investment is significant, and often acquiring a customer costs more than profit.

For some brands getting a large number of initial users is essential to get the business profitable at a later point. Many startups invest in different forms of inbound or content marketing and build their steady traffic from freebies, tutorials and other relevant resources for their users, referral programs, freemium models and other tactics to bring users without investing in standard advertising.

Advertising is a helpful addition when you implement retargeting pixels and promote to the right channels.

Answered 9 years ago

There are many factors which leads to failure in order to get positive ROI.

1) Marketing campaigns showcase products and provide exposure to more users to gain popularity or attain visibility.
---- Its required that product/services for which agency run campaigns are having basic characteristics which the attracts the right audience.
**** Sometimes due to lack of product knowledge or getting the campaign run for right audience fails leading to negative ROI.

2) Being a Project Manager I think Project and Business objective may not be communicated well to Internet advertising agencies that leads to false assumptions and ultimately bad execution of marketing campaigns.

3) Competitor's Campaigns may over-rule your campaigns and diverting the user-base interest to your competitors.

Answered 9 years ago

You might be interested to know that I have been on both sides of this conversation. I have managed in-house marketing for a large ecommerce company and also ran strategy at a digital agency for some of the biggest businesses in the world.

The problem with most online marketing campaigns run by digital agencies consist of two real reasons.

#1 - Most agencies don't do their homework. Online marketing campaigns require lots of work upfront. Smart campaigns, customized to your individual business bring the best results -- but most agencies don't really think about your business. Agencies too often only think about how to get you to sign the contract.

They don't know your products or understand your customers.

Also, if you start a campaign without clear objectives, tools for measuring, and back-up plans for when things don't go as planned you will find yourself in trouble.

#2 - The second factor that plagues online marketing campaigns but is easily fixed (especially if you already are doing #1) is optimization.

You start the campaign small to save money and effort. You find what works. Then once you know what is working you stop doing what isn't working and spend your efforts at ramping up what is working.

Then you continue to test and refine your marketing campaign. Continuous optimization creates significant cost savings which is a major factor to ROI.

If you can't reduce costs it requires you to make a significant amount of new revenue to make up for over spending.

These two factors drive a lot of the issues businesses have with agency led digital marketing. If you need help at getting the most from a marketing agency, or just need to know what you can do to drive strong, measurable ROI let me know.

A few minutes can save you a lot of headaches. I'm just a call away.

Answered 9 years ago

In my experience (and I've been on the agency and client side) there are a handful of mistakes that get repeated regularly by both sides.

- There is no one on the client side who understands digital marketing and can hold the agency accountable
- Expectations for ROI are highly unrealistic in terms of timing. It generally takes at least 3-4 months of testing before you can sort out which channels and campaigns have promise
- There is an idea that digital channels can work very well alone. Generally this is not the case. Digital is most effective when awareness is being driven by other channels, good PR, content strategies, etc.
- There are no clear goals for the engagement other than wishful thinking metrics. Goals should be based in reality, incremental and core to your business.

- They don’t do their industry and client homework up front and/or they don’t make the client do theirs - especially when it comes to audience demographics and habits.
- They spend too much too soon. The best campaigns start small, find things worth repeating and THEN ramp up.
- They misapply lessons from a past client to the current client. Past knowledge of an industry is always helpful but good campaigns focus on the very specific needs of each company. Apple and Samsung are very similar in many ways but their marketing needs and strategies are highly differentiated.

I can recommend a good digital agency if you are having trouble finding one you like. I’ve personally hired them three different times. And I’d be happy to chat if you wanted to dig in on any of the points above.

Good luck!

Answered 9 years ago

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