How to Measure Offline Marketing ROI — the Right Way

We all know digital marketing measurement isn’t perfect by any means. But tracking offline marketing campaigns and channels and their business impact can feel nearly impossible. 

You may or may not have more marketing budget to play with right now. If you’re among the lucky 64 percent of marketers who expect a budget increase this year, that’s awesome. But you still need to make sure every bit of that increased budget provides real ROI. And if you have the same or less budget, it’s time to make every penny work as efficiently as possible.

Let’s check out some ways to know if your offline pennies are getting the job done by reaching and converting your target audiences — just as well as you can track digital results.

Omnichannel: an omnichallenge

Odds are, you’re using a mix of channels to reach your audiences. If you’re measuring only online marketing efforts, you’re left with an incomplete picture of overall marketing performance. (And, it’s worth noting that over half of marketers don’t feel great about their measurement of online marketing either.) 

Ideally, you’d have a holistic evaluation that lets you accurately quantify the impact of both your online and offline channels on customer acquisition and revenue generation. 

With that information in hand, you can optimize budget allocation, ensuring that resources are allocated to the most effective channels. This truly data-driven decision-making leads to more effective and efficient marketing strategies, driving higher customer acquisition and revenue growth.

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Why is measuring offline channel performance difficult?

Offline marketing efforts can be challenging to measure due to the lack of direct attribution capabilities. Unlike online campaigns, offline marketing initiatives such as billboards or print advertisements don’t have built-in tracking mechanisms, making it difficult to directly attribute customer actions and conversions to specific offline touchpoints. 

Additionally, sometimes offline and online channels’ effects interact with each other. Understanding how their interaction and shared influence contribute to overall marketing performance requires careful data analysis.

But don’t despair! There are still ways to measure the impact of offline marketing campaigns, such as utilizing marketing mix modeling, tracking website traffic and phone calls, conducting surveys, and using unique promo codes.

Let’s dive into those methods now.

what does marketing mix modeling offer - as in text

How does marketing mix modeling help with measuring offline channel performance?

Marketing mix modeling (MMM — also known as media mix modeling) is a statistical analysis technique that helps marketers assess the impact of various marketing channels and tactics on overall business performance. 

It involves analyzing historical data to quantify the contribution of different marketing elements, including offline and online channels, to key performance indicators (KPIs) such as sales, revenue, or customer acquisition. 

MMM includes a lot of factors, such as your marketing spend across all channels, market conditions, and even other external variables that might affect your business. All of those are used to build a comprehensive model that explains the relationship between marketing investments and business outcomes. 

Some of the strengths of MMM include:

  • Comprehensive analysis of marketing effectiveness: MMM allows for a holistic assessment of the performance of offline marketing campaigns by considering the interplay between various marketing channels, both online and offline. It provides a comprehensive view of how different touchpoints contribute to overall marketing effectiveness.
  • ROI calculation: MMM enables businesses to precisely measure the success of their online and offline advertising campaigns. It helps marketing teams assess how much revenue and sales their marketing activities produce. Then, they can make better-informed decisions about where to allocate resources.
  • Optimization opportunities: Through MMM, marketing managers can identify the most effective combinations of marketing channels and tactics. Resources can be shifted from underperforming channels to more successful initiatives, both offline and online, resulting in improved customer acquisition and higher returns. 

With MMM’s help, you can make the most of your marketing budget — whether it’s more, less, or the same as in the past.

To get started with MMM, you’ll need past data on promotions, sales, revenue, and other pertinent information. This information may originate from inside sources, such as sales data, advertisement costs, or customer details, as well as outside sources like market research studies or industry research.

While it sounds extremely complex, today’s machine-learning approaches have made using MMM far easier and faster than in the past, when only the largest companies could afford expert statisticians and technology to manage MMM. 

Some companies choose to develop their own in-house MMM solutions, but this will still require the help of experienced data scientists and data engineering support. Companies who don’t have that kind of expertise in house may choose to use a software solution for MMM, which can also be more tightly integrated into the marketing team for greater impact and easier execution.

While it can take some initial effort to pull together, partnering with a technology provider who has developed real, innovative approaches to MMM — and has the experience to make it work for you — can make this process far easier and bring you the return on investment you want fast.

Once the model is developed, marketers can analyze results and gain insights into the performance of their offline marketing campaigns. They can evaluate the impact of different marketing channels, assess their ROI, see the impact of brand equity, identify optimization opportunities, and make data-driven decisions for future marketing strategies. It would also be best to have intuitive simulation tools that use the model to make planning future marketing budgets far easier and streamlined.

Pecan MMM dashboard

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How can you use information from customers to gather data on offline marketing channel performance?

There are definitely other ways to track your offline marketing channels’ performance, but they may or may not be as trustworthy and accurate as you would like.

Here are some methods for gathering data on how customers have found you through offline marketing channels:

  • Call tracking systems: Offline marketing campaigns often include phone numbers as a call-to-action, such as in print ads or billboards. Call tracking systems assign unique phone numbers to different marketing campaigns or channels. When a customer calls a specific phone number, the system captures data such as the caller’s phone number, call duration, and call recording (if applicable).

    These systems use advanced analytics and reporting capabilities to provide detailed insights into call volumes, call sources, call outcomes, and customer behavior. By capturing call data in a CRM system, marketing managers can track customer touchpoints, attribute conversions, and gain insights into the customer journey from initial call to final purchase or desired action.

  • Unique coupon codes: Coupon codes allow marketers to attribute conversions to specific promotions or touchpoints. By providing customers with unique codes associated with offline campaigns, digital marketing managers can identify which campaigns are driving coupon code usage, customer engagement, and ultimately, conversions. Online and offline integration can be achieved by promoting discount codes through offline channels and requiring customers to enter them during online purchases, allowing for cross-channel tracking and attribution.

    QR codes and custom landing pages offer a similar possibility for tracking customer interactions with offline marketing campaigns. Each scan provides measurable data on customer engagement and conversions.

  • Customer surveys and feedback: Surveys provide direct feedback from customers regarding their interactions with offline marketing campaigns, enabling businesses to measure customer sentiment, recall, and overall campaign effectiveness. You might gather in-store feedback if you have brick-and-mortar locations or comments from attendees of an event. 

And, of course, social media interactions and review sites offer different types of insights into customer experiences. Ideally, you can use a combination of these insights to make data-driven decisions, optimize strategies, and enhance customer acquisition efforts.

While each of these methods of looking at customers’ interactions with your offline marketing channels can provide useful insights, looking at the data from each of them individually doesn’t provide the same kind of holistic perspective that MMM offers. To be sure, it’s great to know how many customers converted with a specific coupon code or by calling a specific number. 

However, you won’t know whether the conversion was potentially influenced by the interaction of multiple campaigns across various channels, or by general brand awareness activities you might also be pursuing. Despite all the individual data sources available to you for offline marketing (such as they are), the comprehensive viewpoint provided by a reliable MMM model is irreplaceable.

marketing budget allocation from $5 million to $10 million in revenue

But what about multi-touch attribution? How do MTA and MMM relate to each other?

Multi-touch attribution (MTA) and MMM both try to understand the contribution of all your marketing efforts to your ultimate outcomes. However, they do that in fundamentally different ways.

MTA aims to attribute the value or impact of marketing touchpoints across the customer journey. It considers the entire customer journey, from initial touchpoints to the final conversion or purchase. In the context of measuring offline marketing channels, multi-touch attribution helps identify and quantify the role of offline touchpoints in driving conversions or sales. 

For example, if a customer sees an offline advertisement, visits a store, and then makes a purchase online, multi-touch attribution would assign value to both the offline and online touchpoints in the conversion process. Marketers can choose different models, like time-decay or last-touch, to give appropriate credit to each touchpoint. 

Then, digital marketing managers can identify the high-performing touchpoints, optimize marketing strategies, reallocate resources, and make data-driven decisions to improve customer acquisition and ROI. 

However, MTA is complex, and even choosing the right modeling approach can be tricky. Implementing multi-touch attribution requires careful consideration and ongoing evaluation to ensure accurate and meaningful insights for optimizing marketing efforts.

On the other hand, MMM uses regression models to analyze historical data and determine the relationship between marketing inputs and desired outcomes. MMM can incorporate multi-touch attribution by considering the aggregated impact of all online and offline marketing touchpoints on the target KPIs. 

While multi-touch attribution focuses on attributing credit to specific touchpoints, MMM takes a broader approach by assessing the overall effectiveness of marketing channels and their combined impact. To understand offline campaigns’ performance, MMM can help measure the contribution of different offline channels to sales or other KPIs, taking into account their interactions with online touchpoints. 

By analyzing historical data and applying statistical modeling, MMM can provide insights into the effectiveness, ROI, and optimal allocation of resources across various marketing channels, including offline channels.

Both multi-touch attribution and MMM provide valuable insights, but the key value of MMM is gaining that broader perspective. A marketer with an accurate MMM model can truly grasp the overall effectiveness of all marketing channels, online and offline, and their combined influence on business outcomes.

If you’d like to explore how MMM can complete your marketing measurement strategy — for online and offline channels together — get in touch to talk about how to get started today.

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