* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

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Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Tracking advertising ROI

In a post below, C.Stark said:
"There is a thousand different ways to track this.  Cookies, Special URLs, Special Downloads for certain campaigns, phoning home once in a while, Serial numbers, and a million other things any respectable coder can come up with if need be.  Build a system to track EVERYTHING, and tweak things till you get a good ROI."

Certainly if the person that downloads your software is the same one that purchases, you're good to go.  But that's uncommon in B2B scenarios.  We often see:

1. Underling is told to research and find a product.  They do searches, ad clicks and downloads
2. Underling reports to boss
3. Boss sends request to purchasing.  Purchasing might go to website to pay with credit card, or might send order via email/mail/fax
4. After purchasing, final 'real' download is done to install on production server.

This is a very common scenario.

We haven't come up with a way to track the purchase back to the original search/ad.  Is anyone doing this?
Doug Send private email
Saturday, March 02, 2013
 
 
First: perfect is the enemy of good. 80% of results comes from 20% of effort. In other words: don't spend your time trying because it's most likely of marginal benefit.

That being said, 2 ideas:

1. If you're smart about it, you can correlate ip addresses. The ip address of the underling will be similar to ip address of the boss. Sometimes even the same (because they'll be behind the same corporate router).

2. Generate a unique download builds with unique 10% (or whatever) discount code. Or the build is the same but on first start it hits the web server to generate that unique discount code.

Then in ui say: use this code for 10% discount. Then correlate that discount code with the download.

Would it be perfect? No, but it is how people track effectiveness of magazine ads.

But like I said: I wouldn't obsess over it. There's a point of diminishing returns.
Krzysztof Kowalczyk Send private email
Saturday, March 02, 2013
 
 
Forget about calculating the ROI of advertising.  It can't be done.  There isn't a single advertising firm that has ever produced a formula that you could take to the bank.  But advertising can turn an unprofitable business into a profitable one.

Think of this as a flowchart.  First decision point is the price; does it mandate online selling only, or some level of person to person contact, from email to live sales calls?  The amount of seller/buyer interaction determines what steps are necessary to close a sufficient number of sales.  At a high level, the decision making process is similar in all cases, moving the buyer from a) making the need concrete, b) creating awareness of your solution for the concrete need, c) exposing the value of your solution, d) creating a sense of urgency to obtain that value and e) removing any obstacles to completing the transaction before the buyer gets distracted or changes his/her mind.  Once the buyer gets to that stage, you have to be an idiot to lose their business.

Advertising can be effective at any of these stages, but it all depends on how you have to move the customer from a to e, which all depends on your price.  Advertising isn't 100% effective, and neither are any other marketing activities, so you can never be sure what weight to give any of them in completing the transaction.  So you make a qualitative judgment as to whether they are worth the expense or not.

Do you have a ROI target for marketing activities, or do they just have to provide incremental profit?  It's  much easier to determine if the net benefit is positive or negative than to assign a sensible number for ROI.  Let me repeat: forget about calculating the ROI of advertising.  It can't be done.
Howard Ness Send private email
Tuesday, March 05, 2013
 
 

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