As a marketer, you’re judged on the return you get on marketing spend. Part of your job is to prove the effectiveness of your digital marketing efforts. While we respect the intuition of your gut, it’s always a good idea to back up your marketing strategy with some good, hard data. Data that you collect and analyze (not just vendor-reported). Data that’s clean and reliable. Data that you can use to make your case for more budget.
While your data will never be perfect and marketing remains both an art and a science, the bottom line is, to get the data you need, you first and foremost have to have your UTM codes (aka UTM parameters, UTM tags, or tracking links), in order. Without them—applied properly—your digital marketing is essentially flying blind.
While you can get some insights from Google Analytics without using UTMs, you’re really limiting yourself. Applying UTM codes means that you can not only attribute a sale to a specific channel (e.g., Facebook, email, Google), but know which specific campaign or link the user clicked on. This is critical information to understand which campaigns/messaging/offers are working better than others and if you’re allocating budget effectively.
Even more importantly, UTM codes allow you to capture your own digital marketing data that you can analyze in different ways for different purposes. Although vendor attribution reports may seem to simplify your life, they don’t give you access to the underlying data, which can leave a lot of unanswerable questions.
Quick recap: What are UTM codes?
“UTM” is way easier to remember than “Urchin Traffic Monitor”—but the fun fact here is that the name refers to Urchin Tracker, a software that was acquired back in 2005 by Google, launching what we know today as Google Analytics.
UTMs are snippets of code. You’ve seen them. They’re added to the end of a URL to track the performance of marketing campaigns and other content. There are five UTM codes (or, UTM tags) you can customize to understand where your site visitors came from and what campaign, link or keyword they saw and clicked on—which you can then use for determining sales attribution.
While UTM links can be long, they’re easy to understand if you know how they’re structured, consisting of three to five different parameters: source, medium, campaign, term and content. Below is an example that’s broken down for easier understanding:
The first three of the five parameters (utm_source, utm_medium, and utm_campaign) are the most commonly used and most critical. The last two aren’t used as often. Utm_term is used to track keywords for paid search (most marketers rely on vendor reports for this), and utm_content, which allows you to see which link a potential customer clicked on if they had multiple CTAs to choose from.
It’s time to take a hard look at your UTM parameters
You may be using UTM tracking, but have you taken a look at it lately? If you’re not vigilant about consistency, it’s easy for UTM parameters to go off the rails – making your data inaccurate and hard to trust. Are you using:
- Consistent naming conventions for UTM parameters that everyone uses EXACTLY as written? Even small differences like capitalization and dashes can be a big problem.
- Intuitive naming practices for campaigns that don’t need a secret decoder ring to figure out?
- A unique UTM code for every campaign?
How to get the most from UTM codes
There are a few best practices you can apply to get the most value for your marketing efforts using UTM tracking links.
We can’t emphasize this enough. Make sure each of your marketing channels is categorized with the same source and medium UTM parameter terms, and that campaigns are tagged with the exact same descriptor. You can use Google’s UTM builder to help ensure your UTM code is formatted correctly. Also, create a shared spreadsheet with agreed-upon parameter tags and clear rules for capitalization, campaign naming conventions, etc. that everyone uses.
Customize the campaign UTM parameter
Don’t just leave it at source and medium! Getting down to the campaign level is critical for understanding what marketing is most effective on which channels. Again, make sure to use a descriptor that’s intuitively understandable. Also, since longer tags can be truncated when looking at the results in your analytics platform, keep descriptors as short as possible and be sure that the descriptor uses easily identifiable words at the beginning (e.g., “30% off shoe sale,” versus “sale promotion shoes 30%.”)
Apply attribution models to the data
Yes, “models” is plural! It’s a best practice to look at your data using a few different attribution models (not just what Facebook reports)—such as first-click, last-click and linear—to get a more accurate view of what marketing is most effective. No one model will give you “the answer;” the truth is always somewhere in the middle.
Compare performance across channels
With consistent UTM codes giving you cleaner data and a more reliable picture of marketing attribution, a next step is to compare performance across channels to help you better determine the most effective marketing spend allocation. To do this, use the metrics in your six-pack (e.g., return on ad spend (ROAS), cost per order (CPO) and cost per acquisition (CPA)) to compare revenue to cost. You may find, for example, that you get more value from marketing campaigns on Instagram and shift more budget there.
The power of good UTM hygiene
It’s a domino effect. You clean up your UTM parameters, you get better data for marketing attribution. A clearer picture of marketing attribution gives you a more accurate basis on which to compare the value of your different channels. That information, in turn, helps you prove the effectiveness of your marketing strategy.
Cost per acquisition and ROAS are important metrics because they’re a good way to have a conversation with finance about how and why marketing dollars are being spent – and if more should be invested in a particular channel because you can show it will likely yield a certain return based on data.
Know your CPA
Your cost per acquisition (CPA) is how much you’re spending to acquire a customer. It’s extremely valuable to know your cost per acquisition in total and for each channel. Often investors and/or board members want to know the cost per acquisition compared to customer lifetime value (LTV)—in other words, how much total revenue will come from this customer compared to what it costs to acquire them? If you’re just using vendor-reported data to understand cost per acquisition, you’re likely not getting an accurate picture, because vendors tend to try to take as much credit as possible. It’s a good practice to also look at other data and use other methodologies to get closer to understanding your actual cost per acquisition number.
Know your ROAS
Your return on ad spend (ROAS) is the number of dollars you make for every dollar spent on marketing and is calculated by dividing total revenue by total marketing spend. It gives you a high-level average, which is particularly useful if you have a large product catalog of widely varying price points. Calculating ROAS by channel helps you see where you’re getting a better return on ad spend and determine if you should be spending more or less in certain channels.
Bring it all together
Once you fix your UTM codes, how can you most effectively use and analyze the data? Using a data analytics platform, of course!
Daasity’s dashboards make it easy to view CPA, CPO, and ROAS using different attribution models including first-click attribution, last-click attribution, and vendor-reported attribution, so you can get a timely view of all of your marketing channels in once place. Daasity also provides a solution to map all of your channels—beyond what other platforms can do—for a fuller picture of marketing attribution. Let us show you a demo.