Marijuana Marketing 101: Measuring Offline vs. Online ROI

on September 10, 2015

The purpose of this blog post is not to suggest that you should stop attending trade shows and business expos — particularly if attendance yields a positive ROI for your company. Instead, I challenge you to really look at the numbers. Do you really know what the cost of acquiring a new lead at a trade show is? Have you examined how that compares to the cost of acquiring a new lead through your website? Read on and we’ll break it down.

Measuring Offline vs. Online Marketing ROI

Event marketing will always be appreciated and is one of the most effective business tools you have for rapidly growing your business and obtaining new B2B leads. What can’t be ignored is that online marketing is equally, or even more valuable to your business — especially B2C companies.

Two important stats from the 2013 State of Inbound Marketing report sum up the value of marketing online vs. offline:

  1. The lowest cost per lead came from digital ads and email marketing, followed by SEO. All three of these sources are part of the online lead development infrastructure, and focused on driving visitors to lead-capture opportunities on the company website.
  2. The highest cost per lead came from trade shows, with only 12 percent of respondents reporting a below average cost per lead.

Cost of Attending a Trade Show or Expo

These costs of course vary by industry, company and show. But for simplicity’s sake, let’s assume you’re a start-up with a small team consisting of just three founders. For this scenario, we’ll use the following numbers:

  • Floor space: $5,000 to $25,000 (let’s use a $5,000 sponsorship fee for this example)
  • Shipping, construction, rentals, & other misc. floor costs: ($1500)
  • Simple 10×10 booth design, printed marketing materials: ($5000)
  • Airfare: $500 x 3 attendees ($1500)
  • Hotel: $250 x 3 attendees x 2 nights ($1500)
  • Meals: $50 x 3 attendees x 2 days ($300)

That’s approximately $15,000 PER trade show, even when attending on a strict budget with a small team. If you plan on attending just four trade shows per year, you’ll need to be prepared to invest $60,000 of your annual marketing budget in just a few quick sprints.

For that type of investment, your company needs to be thinking about the type of return on investment (ROI) it is seeing from each of its different marketing efforts. For this example, let’s assume you walk away from each one of these four shows with 50 new B2B leads (that’s 200 total leads/year). If this is the case, you’ll have paid $300/lead. Flag that number; we’ll come back to it shortly.

Cost of Marketing Your Brand Online

On average, an effective website or landing page converts at least 2 percent of its visitors into leads. That means for every 100 visitors, your website should produce two new contacts with names, phone numbers and email addresses who are interested in something you have to offer.

Now, let’s say you invest $5,000 each month into a strategic digital ad campaign using a service like MANTIS (the same $60,000/year you would invest in just 4 trade shows). In this scenario, you decide to implement a simple pop-up modal on your website designed to collect e-mail addresses from interested leads that hit the page. This can be a special offer designed to collect e-mail addresses, a custom landing page with some sort of call-to-action, or a mixture of both (preferred). 

If you bid $1.00 per click to reach your desired audience, your website would be sent roughly 167 visits a day ($5,000 monthly ad spend ÷ by 30 days ÷ 1.00/click), or 5,000 visits each month. That’s $1.00/lead for display advertising compared to the $300/lead for event marketing. Now, ask yourself the following questions:

  • “Can we reach the same decision makers online than we can in person?
  • Does my company really need the event to make the deal, or… can we schedule meetings outside of the event, save some serious cash, and still see similar success as if we attended?
  • What was our exact CPL per event for the past year?
  • Should we try shifting more funds towards digital marketing?” 

From the 5,000 new leads sent to your website from a digital ad campaign, let’s assume a minimum of 2% of the visitors continue to purchase a product and/or opt-in to your pop-up modal and submit their contact information to be added to your sales funnel. At this conversion rate, you would be generating 5000 potential new customers, plus roughly 100 additional qualified prospects/sales each month for a total of ~1200 prospects/sales annually. That’s a whopping 4,800 more leads than you would obtain from attending events with the same exact marketing budget.

When To Try Digital Advertising?

Companies looking to target a very-specific audience can easily do so in order to maximize their marketing campaigns ROI. Simply put, digital marketing has the potential to offer advertisers greater control over who sees their ad campaign, which means less money wasted on people who have no intention of buying.

Digital advertising is also particularly helpful for generating useful leads that can later be used for re-marketing efforts, turning your ad spend into a way to create long-term brand ambassadors. The advanced level of automation, customization, and flexibility of most digital ad networks makes marketing your marijuana business online easy. 

Now is the perfect time to start marketing your brand online!

 


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