What Is Digital Marketing ROI and How to Measure It
When getting into any aspect of doing business, it is essential to monitor results consistently. However, when discussing any marketing, doing so can be rather tricky. To mitigate, if not eliminate this problem, we’ve put together a guide on what is digital marketing ROI and how to measure it!
Understanding digital marketing ROI
Digital marketing ROI, or return on investment, is the measure of revenue growth versus cost. If the revenue growth is large enough, you can say you get your due ROI. On the opposite end of the spectrum, you have failed to generate any ROI, meaning you are wasting your money on digital marketing drives. In that case, you need to consider finding help with your digital marketing and redoing your marketing scheme. This is where a full service advertising agency can help. Sometimes, all you need to do is adjust your approach to improve results massively. Still, when you’re stuck in the middle of a mess, it can be hard to approach looking for a solution properly.
Zero in on important performance indicators
The complex nature of trying to gauge your digital marketing effectiveness and the ROI you are generating makes it necessary to observe several key performance indicators. You can’t form a complete picture without considering all or most of them. Of course, this does not mean you should ignore indicators that are not considered ‘crucial.’ They are just the easiest to track and reliably interpret.
Number of unique monthly visitors
The number of unique monthly visitors is substantial because it shows your customer base’s growth potential. The more people new people pay attention to your site and the services or products featured on it, the greater the chances of getting brand-new customers. The nice thing is that some cheap digital marketing drives can provide excellent digital marketing ROI here. For example, even if you look for ways to create more valuable content and invest in some blog posts, you can generate tons of organic traffic on your website. These readers are not guaranteed to become your customer. But, with just a few strategically placed links in your posts, you can massively improve the chances of that happening.
Cost per lead concerns
Cost per lead is one of the simplest ways to measure your progress. It tracks approximately how much each of your generated leads is costing you. Of course, the key here is that fewer leads cost you more than many. If you get only a couple dozen leads, you’ve sunk your entire digital marketing investment into only getting those few people to check out your products or services. On the other hand, the higher the number of generated leads, the more cost-effective your investment becomes and the higher your digital marketing ROI is.
Conversion rates
Conversion rates will reveal how many of your leads actually end up becoming customers. This is another crucial way to measure digital marketing ROI, especially when comparing the costs of each lead generated versus the number of leads that end up providing you with a profit. After all, this will impact the profitability of your marketing drive. And even dictate whether it should be continued or immediately altered to improve results. Generally, however, you should give your digital marketing campaign some time before trying to measure this particular performance indicator. No matter how good a campaign is, it is impossible to achieve instant results!
Return on ad investment
This particular way of tracking digital marketing ROI is rather easily tabulated. After all, it is possible to flag the links which derive directly from ads. This way, you will know exactly whether leads are being generated by your ads or your other digital marketing investments. The reason why it’s so important to know whether ads are performing well is the sheer cost of keeping them up. And that cost only comes after you’ve sunk considerable resources into actually making the ad in the first place! This is the reason why digital ads have become so popular. They just cost much less to create and disseminate than traditional ones.
Strive for objective data collection
There are several ways to guarantee you are getting genuine and unbiased data. First, you can tag links with UTM parameters and leverage Google Analytics to track the data. This will flag each click-through and reveal where it came from. Then, you can use digital tracking pixels added to your website to track the origin of the traffic. Finally, you can use CRM software for digital marketing purposes, and both get fantastic ROI for your software to make the most of it and shed light on your digital marketing success.
Have clear-cut goals to pursue
Like always when doing business, you can’t just go into a project without clear-cut goals to pursue. You need to know exactly what sort of performance indicators you want to improve in order to be effective. Even if all you set down is increasing lead generation and conversion rates as your goal, it will still let you track how well you are doing. Does this mean you won’t see improvement in areas you didn’t target? Or that you won’t underperform in targeted areas while excelling in unexpected ones? Well, no, both can happen! Having marginal improvement in every possible performance indicator shows stellar digital marketing investment. On the other hand, missing your mark entirely is bad, even if the results are unexpectedly good. A result reveals your team’s inability to properly organize a digital marketing campaign.
Final comment
Now that you are familiar with what digital marketing ROI is and how to measure it, you should be better armed to properly promote your business. Keep in mind, though, that digital marketing is a work in progress that takes time. Never expect instant results, and base your analysis on that assumption!