How well is your digital advertising strategy working? Can it be more effective? How does it measure up to your competition? These are the questions that benchmarking your digital advertising strategy will answer.
Benchmarking is a process that involves the comparative research and analysis of data to determine how well your business is faring in the marketplace. This approach allows companies to take an objective view of their industry as a whole, and how they ultimately fit into the grand scheme of things.
Organizations are also able to identify what their counterparts are doing incorrectly with their strategy and adapting to the market discoveries for increased market share. Benchmarking compares practices and metrics used to determine the current state of the market and how your business weighs up against various market references.
Types of Benchmarking
Benchmarking can be broadly categorized as either internal or external. Sometimes referred to as competitive benchmarking, external benchmarking is performed by comparing your business to other companies. These companies are typically direct competitors or peers, but there are times when companies from other sectors are used.
Internal benchmarking involves internal investigation, data gathering, and analytical evaluation of results of the study where practices, processes, and performance of a company. The various factions of the business are weighed against each other. For example, various departments, teams within the sales division, groups, and even individual employees can be analyzed.
Both internal and external benchmarking can be used in the following ways:
- Performance benchmarking: This process consists of gathering outcome-based data that shows how well your business is performing. The metrics can be regarding factors ranging from customer satisfaction to sales and everything in between. The outcomes can be compared either internally or externally.
- Strategic benchmarking: In this instance, strategic approaches and business models are compared in order to ascertain how the company can strengthen its planning and outline strategic priorities. The primary objective is to identify what practices and processes denote the strategic success of other companies or factions within an organization.
- Process benchmarking: This process involves the analysis of comparative performance data relating to your company’s processes. This comparison can also be internal or external. The objective here is to improve and optimize the company’s processes.
Here we will be focusing on the strategic benchmarking of your company’s digital advertising strategy.
Determine Your Goals
The initial step of the benchmarking process is to clearly identify your goals. While it is clear that you are looking to benchmark your digital advertising strategy, you need to be more specific. What are the questions that you are looking to answer in regards to the advertising strategy?
Some examples of goals are finding the data connected to:
- Ad-related traffic increase analysis
- Video marketing campaign effectiveness
- Social media advertising ROI
- Paid search rankings
Define the Metrics
There also must be some specificity in regards to the metrics used in the benchmarking process. Your study needs to be clear and laser-focused.
The following metrics represent data that will paint an accurate picture for your analysis:
- Average click-through Rate
- Conversion rate
- Cost per click
- Cost per action
Create a List of Competitors
Now that you have defined your goals and metrics in order, it is time to compile a list of your competitors. These competitors will be the subjects of your investigation into the state of the industry.
When choosing competitors, make sure they are comparable in scale to your company. If you are evaluating a major company with a massive advertising budget, the process will not accurately reflect a realistic view of what is possible for your company currently.
Analyze Your Competition
Use your goals and metrics to paint a picture of your competition. When dealing with social media advertising, companies like Facebook and Google publish advertising benchmarks by industry. This is a great place to begin your research. Your goal is to find the numbers that will give you an indication of the current state of the marketplace.
Generate a Benchmark Report
Once you have gathered and analyzed the data for your process, you need to generate a benchmark report. Your digital advertising strategy should encourage new buyers; so, draft your report with this in mind. Where are your weak points, and how can you strengthen them?
Take an objective and realistic view of your findings. Be honest about where your company currently stands in your industry today. The report should represent the data in a fashion that clearly shows where changes are recommended.
Develop Your Improvement Plan
Once you have your data laid out in a definitive report, it is time to put the data into action. The next step is to devise an action plan for improvement. Look at your original goal list and use it to help create your plan. What ways can you improve in each of those areas you outlined? You now have the data you need to develop a more effective strategy.
Monitor Your Return on Investment
The only way to monitor efficiency is by keeping track of performance. How well are your advertising dollars performing? Benchmarking is not a one-phase single faceted practice; it is a process that has various phases. Monitoring your investment subsequent to your new findings is important to evaluate the effectiveness of the campaign.
Benchmarking your digital advertising strategy will give your company a definite advantage over your competition because you are able to benefit from the data gathered.
The benchmarking process produces some valuable jewels that give specific and actionable practices that can be implemented in the current market environment. The willingness to take san objective look at your business, and the readiness to make changes, is how smart companies navigate in an everchanging marketplace.