Determining the Success of Your E-commerce Advertising

Digital marketing has allowed businesses and marketers to gauge the success of advertising campaigns far more than in the days of exclusively traditional media. We are now provided with large volumes of data about the number of visitors to a website, how they interact with the website and how many conversions came from those visits. These metrics can then be broken down by the source that the visitors came from, which allows for further analysis – is that particular source successful? However, one of the problems that comes from this method of analysing data is that marketers can tend to become “siloed,” determining the success of their strategies based on the performance of visitors from one single source, ignoring other factors. One way to avoid this is by investing in holistic digital marketing, taking a look at what is happening from a ten thousand foot overview and evaluating accordingly.

E-commerce is the ultimate expression of modern marketing. It is one of the few areas where, for the most part, you can track performance from when the customer first arrives at the website to when the transaction is completed. It can be as simple as correctly setting up your analytics tool to track e-commerce. However, we are seeing more and more businesses having the need to sell across e-commerce marketplaces on the web alongside their own site—especially once the pandemic saw brick and mortar stores close and businesses having to shift their stores online. In 2020, retail sales on Amazon in the US were 31.4%—nearly a third—of all online retail spend (Digital Commerce 360). The top five online retailers in 2020 also included Apple and Walmart vying for second place while Dell, Home Depot, and Best Buy brought up the rear. This doesn’t even scratch the surface when it comes to online marketplaces like the growing Facebook marketplace and Instagram’s capability to buy directly from the feed. With so many e-commerce marketplaces trying to get a piece of the pie, it is becoming essential for growing e-commerce brands to be selling on multiple platforms beyond their website. This is where it becomes tricky to determine the success of digital marketing campaigns. In most cases, the e-commerce marketplaces do not integrate with analytics tools such as Google Analytics.

To effectively determine the success of your marketing you need to start by benchmarking revenue by channel. This includes investigating where the majority of your customers complete their purchases and where they will be getting the best deal. This may not be any of the channels you manage, especially if you sell to independent distributors. Having revenue data by channel is the easiest and most effective way to determine success as it accounts for all the customers who may have clicked on an ad and visited your website or product page but then might have completed the purchase elsewhere.  From here you can start to build out a funnel to map user activity and what each stage plays in the path to conversion. For example if website revenue only increases slightly from a Google Ads campaign but Amazon sees significant growth, then the website may just be playing an awareness and consideration role. In this case, the success of your Google Ads campaign should be judged on user engagement metrics rather than return on ad spend. This information can then be used to determine where to focus advertising efforts and what strategies to use.

Determining success of e-commerce advertising in this multiple channel and multiple marketplace world can be tough. With the right approach to measurement you can ensure that you are maximizing your return on ad spend, even if a singular ad platform isn’t seeing a positive return on ad spend, it doesn’t mean it is not a success.