13. Measuring The Brand Impact of Paid Ads
- Arindam Paul Founding Member and CBO, Atomberg
- Vamsi Krishna Ex-Marketing Leader, Licious and Teabox
In this snippet, Vamsi shares insights on how B2C and B2B companies should calculate CAC, emphasizing the importance of including brand marketing costs in the equation to achieve a long-term reduction in acquisition costs.
My basic definition of CAC is that in B2C, I look at marketing as the primary CAC because there is no sales element involved. But in the case of B2B, marketing and sales costs together become the acquisition cost.
One question I am often asked is if you should add Brand Marketing costs to the CAC. I would say yes. At the end of the day, that's marketing money going out.
You might not be able to justify it immediately in terms of CAC because it will be high, but you should work toward a point when your Brand spends lead to clear ROI. That’s the objective. That’s why you’re spending brand money.
You need to have a way to measure CAC with Brand spending and a clear hypothesis about when it will lead to a lower CAC. It should ideally be in the next six to twelve months.
Arindam expands on measuring the impact of brand marketing on CAC at Atomberg, highlighting indicators like brand searches, organic visitors, and brand tracking surveys as effective ways to assess long-term brand impact.
At Atomberg, we use some immediate and lagging indicators to measure how our ads are affecting Brand.
In terms of immediate indicators, Brand searches are a very good one. They are not completely immediate, but if your Brand ads are working, you can see your Brand searches grow with a lag of three to six months.
Another good indicator is the kind of organic visitors you get. If you're investing a lot in content and your content is getting shared, whether from your website, YouTube, or Instagram, slowly and gradually, you'll see your organic visitors increase and they will convert.
The gold standard here is doing Brand Tracking.
Brand Tracking is when you define a sample space of your consumers and reach out to them for a quick survey. The sample should be statistically significant.
You ask simple questions, such as ” What comes to mind when you hear Yoga?” or “Have you heard the name of our brand?”
The first name respondents recall is at the top of their minds. The brand they recall without your prompting is unaided or spontaneous awareness, and so on.
But you should only start Brand Tracking after you reach a decent scale.