What is Digital Optimization + Why Does it Matter?
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Pathlabs Marketing |
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June 15, 2023 |
It feels great to improve marketing efforts and streamline processes incrementally. Don't worry if you have a specific fixation or zest for this; it is not odd. You just love optimization.
In this blog, we explore what digital optimization is in a marketing context, the latest strategies and tools to improve your optimization processes, and we’ll take a look at how you can unlock your full optimization potential as a marketer.
What is Digital Optimization?
Digital optimization is a systematic approach to improving digital marketing performance by experimenting with different strategies and processes, reviewing performance insights, and making adjustments.
The overall goal of digital optimization is to maximize the effectiveness and efficiency of marketing efforts by identifying what works, what doesn’t, and pivoting accordingly.
“[Digital] optimization should never be a ‘one-and-done’ type of ideology: it requires constant attention and analysis throughout. By embracing digital optimization, marketers can enhance their overall performance and achieve better results in their digital initiatives.”
How We Approach Digital Optimization at Pathlabs
At Pathlabs, we go about optimization in a scientific method format. Before we run a campaign or marketing effort, we determine our objectives:
Do we want to promote more landing page views?
Is it our goal to increase ROAS or decrease Cost per Transaction?
Should we try to maintain the current retention rate on newsletter subscriptions?
Based on these objectives, we develop a hypothesis. In this case, the hypothesis is our selection of channels, ad formats, targeting methods, and pricing allocations that will best meet our objectives. During this portion, we heavily consider historical and behavioral data corresponding to our audience and industry to set out this framework.
Once we activate and test our hypothesis (the campaign), we record the performance and results, sifting through them for critical insights.
Based on these insights, we modify the original campaign strategy, then repeat the process: forming a new hypothesis, testing it, and pivoting accordingly. This is optimization.
“At Pathlabs, we believe the key to running any successful ad campaign isn’t just in the initial setup; it’s repeatedly determining what’s working, what isn’t, and making strategic and performance-based decisions corresponding to these findings. We constantly ask ourselves, ‘How can we turn our findings into actionable insights?’ Anyone can report on the status and metrics of a campaign, but it takes a true, committed team to take those learnings and use them to fill in the gaps and work towards improving campaign performance. This mindset lends itself to an unwavering dedication to our goals and ultimate growth.”
Why Should Digital Optimization Be An Integral Part of Any Marketing Strategy?
Incorporating an optimization-based method into any marketing strategy is crucial because it is rare for marketers to achieve all their objectives perfectly on the first attempt. Initial failures are common, such as setting bid prices too high or too low, targeting the wrong parameters, or needing a clearer understanding of the target audience.
To avoid repeating these mistakes, marketers embrace the attitude of optimization. They acknowledge that achieving objectives requires gradual hypothesis development, testing, and meaningful adjustments. By continuously improving and refining their strategies, they can achieve better outcomes and reach their goals.
Furthermore, optimization provides a level of structure to marketing efforts. To optimize, teams must be strict with setting objectives, recording campaign metrics, and analyzing overall performance. Therefore, they must make necessary adjustments to comply.
This structured approach also allows for experimentation and exploration. Teams can constantly test different channels and methods, meticulously recording and cross-comparing results. They may even come across a technique they wouldn’t have found without experimentation.
What Problems Does Digital Optimization Solve?
Digital optimization solves the problem of campaigns and marketing efforts that don’t perform as the marketer wants. Like scientists, this process of hypothesizing-testing-analyzing-pivoting-repeating is the best framework and solution to tackle this problem head-on.
Implementing an optimization mindset is also an excellent leadership method. Marketing team members often face pressure knowing that their decisions directly impact campaign and marketing success – not an easy position to be in.
However, as a leader, by emphasizing to the team that the goal is not immediate perfection but rather iterative progress toward objectives, team members feel less stressed and more willing to experiment and step outside their comfort zone. Compare this to a leader who tells their team that they must get it right on the first try or they have failed.
Lastly, effectively allocating ad budgets is another critical concern for marketers. Optimization enables them to avoid wasting resources on channels and domains that don't deliver desired results. By utilizing spreadsheets, data recording, and programmatic tools for analysis, marketers can chart and compare metrics, making informed decisions on marginal modifications that maximize the impact of their budget.
Real-World Examples of Digital Optimization
Paid Search and SEO
In the realm of paid search marketers utilize platforms like Google Ads to bid on specific keywords and set daily bidding limits. Since they cannot initially predict the most effective keywords, optimization-focused marketers start by selecting a few keywords and bid ranges to observe as baseline results. They then test and adjust these strategies until they achieve the desired outcomes.
For search engine optimization, the language on a web page dictates whether Google will pick it up and serve it in search results or snippets. Marketers optimize this language by creating an initial iteration of it, documenting it, reviewing results, and making necessary edits – making it more concise, flashy, interesting, etc.
Mobile Advertising
Marketers can run ads via mobile devices. Google likes to stress the importance of making these mobile ads quality. Like SEO, teams can optimize this ad quality with their chosen language: testing multiple calls to action, personalizing strings of speech, and emphasizing what is important.
Email and Web Page Optimization
Email and webpages are fundamental in digital marketing, and various tools can optimize their performance. Marketers can use platforms like Hubspot to automate specific workflows, thus speeding up lead-generation processes. While others, like Adobe Target, offer A/B testing that helps marketers randomly test and identify the styles and formats that resonate most with users.
Content Marketing
At Pathlabs, we constantly optimize our content on platforms like LinkedIn, webpages, and blogs by experimenting with different ad copy lengths, styles, graphics, and page layouts. We rely on the content’s engagement data to assess their effectiveness and determine whether they resonate with our audience.
Lastly, we are open to experimenting with unique and less familiar topics to understand what works best for our marketing efforts.
DOOH Optimization
DOOH (digital out-of-home advertising) encompasses digital billboards and ad signage experienced outside the home. These digital billboards often feature elements like 3D visuals, videos, and sounds. Marketers leverage programmatic capabilities and data tracking to place their DOOH ads. By attributing engagement and looking at awareness metrics, marketers can optimize their campaigns by adjusting budgets, experimenting with new ad placement locations, and focusing on ad inventory that generates the most positive results.
Display, Native, Video & Audio
Marketers frequently use programmatic platforms to deploy display, native, video, and audio ads, allowing them to select specific targeting parameters based on audience behavior, demographics, and interests.
AI and machine learning within these platforms will then analyze the data and optimize the campaign autonomously. This programmatic technology has significantly alleviated the analytical and optimization workload for marketers.
Social Media
Many teams aim to increase organic and paid traffic on social media. Suppose they are unsure about the right content to post; they can experiment using videos, photos, reels, stories, trending music, memes, or whatever is available and evaluate the resulting performance.
Based on the results, they can form a hypothesis regarding which content type works best, testing it further to identify the optimal combination. Experimenting with posting times, hashtags, and pricing amounts is also crucial to determine optimal placement tactics.
Digital Optimization Analytics
Digital optimization analytics refers to the technologies, formulas, and metrics available to help marketers optimize their marketing efforts.
These analytics aim to extract valuable insights to better understand past marketing performance and develop future hypotheses.
“What is excellent about optimization is that marketers can implement it no matter the campaign goals or KPIs. They may use minimal analytics and apply creative analysis, removing poor-performing ads, or they can leverage some of the analytic methods below to nail down the perfect channels and audience mixes that adhere to the business’s overall objective.”
Attribution
Attribution is the act of figuring out which of the many touchpoints (landing pages, social media posts, blogs, etc.) that a marketer puts out online directly contributes to user action and conversions. This comes in handy if a marketer sees that a user converts, but there are two or more digital locations they could have come from.
Attribution is possible for all kinds of marketers to implement; they just need to figure out how they want to track each touchpoint location and what credit to assign.
Attribution and optimization go hand in hand. To optimize, teams need viable data to determine campaign success. Attribution measures taken by a marketer can generate this data.
Programmatic Platforms
Programmatic platforms streamline digital optimization analytics by automating ad buying and targeting. They leverage real-time data and algorithms to optimize campaigns, improve targeting precision, and drive better performance.
Funnel Analysis
Funnel analysis tracks and analyzes the user journey through various conversion funnel stages, such as sign-ups, purchases, or form submissions. It helps identify bottlenecks or drop-off points, allowing businesses to optimize specific steps and improve overall conversion rates.
Heatmaps and Clickstream Analysis
Heatmaps visually represent user interactions on a webpage, highlighting high engagement or attention areas. Clickstream analysis tracks user navigation patterns, including clicks, scrolling, and cursor movements. These techniques provide valuable insights into user behavior and help optimize website layouts, content placement, and call-to-action buttons.
A/B Testing
This technique involves comparing two or more versions of a webpage or element to determine which performs better in user engagement or conversion rates. Randomly splitting the audience and analyzing their behavior helps businesses identify the most effective design, content, or functionality.
Insightful Metrics
Conversion Rate
Measures the percentage of website visitors who take a desired action, such as purchasing or filling out a form. Helps marketers identify areas of improvement in their sales funnel and optimize website elements to increase conversions.
Click-Through Rate (CTR)
Measures the percentage of users who click on a specific link or ad compared to the total number of impressions. Helps marketers optimize ad copy, imagery, targeting, and placement to increase user engagement and attract more clicks.
Bounce Rate
Bounce rate indicates the percentage of visitors who navigate away from a website after viewing only one page. A high bounce rate suggests a lack of engagement or relevancy. Marketers optimize website content, design, and user experience to encourage visitors to explore further and reduce bounce rates.
Return on Ad Spend (ROAS)
ROAS measures the effectiveness of advertising campaigns by comparing revenue generated to the amount spent. Helps allocate budgets wisely and identify the most profitable channels, campaigns, and targeting methods to minimize costs.
Customer Lifetime Value (CLV)
CLV estimates the total revenue a business can expect from a customer over their entire relationship with the company. By calculating CLV, marketers can optimize their strategies to acquire and retain high-value customers, personalize marketing efforts, and allocate resources more effectively to maximize long-term profitability.
Essential Digital Optimization Tools for Marketers
Several technologies and platforms can assist in implementing the digital optimization analytics techniques mentioned above. Here are some examples:
Web Analytics Tools
Platforms like Google Analytics, Adobe Analytics, and Kissmetrics provide in-depth insights into website performance, user behavior, and conversion tracking. They offer a range of features to analyze data, set conversion goals, create custom reports, and track key metrics.
A/B Testing Tools
Optimizely, VWO (Visual Website Optimizer), Adobe Target, and Google Optimize are popular A/B testing tools enabling businesses to conduct experiments and compare versions of webpages, layouts, or features. These tools provide statistical analysis and reporting capabilities to determine the winning variation.
Heatmap and User Behavior Tracking Tools
Tools such as Crazy Egg, Hotjar, and Mouseflow generate heatmaps, clickstream analysis, and user recordings to visualize user behavior and website interactions. These tools help identify areas of high engagement, uncover usability issues, and optimize web design and user experience.
Conversion Optimization Platforms
Platforms like Optimizely and Unbounce offer comprehensive suites of tools for conversion rate optimization. These platforms provide features for A/B testing, personalization, user segmentation, and advanced analytics to improve conversion rates and user engagement.
Predictive Analytics Tools
Tools like IBM Watson Analytics and RapidMiner leverage machine learning algorithms and predictive modeling techniques. These tools help businesses analyze historical data, forecast future trends, and make data-driven predictions for optimization strategies.
Marketing Automation Platforms
Marketing automation platforms like HubSpot, Mailchimp, and Salesforce Marketing Cloud offer lead nurturing, email marketing, campaign management, and reporting features. These platforms help optimize marketing efforts, track customer journeys, and automate processes for improved efficiency and conversion rates.
“Any time we can utilize tools outside the ad-serving platform is an opportunity to uncover insights we may not have had visibility to in-platform. Tools such as Google Analytics can provide a much deeper look into user sets and, for example, inform whether they are new or returning. Insights such as this help uncover gaps in our targeting and inform us where to push more advertising budget”
In Conclusion…
Digital optimization is essential for maximizing digital marketing success. Marketers can achieve better results by refining strategies, testing approaches, and analyzing data. Embrace an optimization mindset, experiment with different tactics, and let it guide you on the path to success in the ever-evolving world of digital marketing.
