How can you measure the ROI for your digital marketing campaign? See if you're getting your money's worth from your campaign.
According to the Data and Marketing Association, 38% of marketers are increasing digital marketing budgets over the next two years.
A digital marketing campaign is a way to target people through the internet. Using a good online strategy can actually cost less than a direct marketing strategy as well as help your business continuously improve customer relationships. Additionally, it can still yield a good return on investment in the process.
But you need to be able to see how much it really impacts your business before you increase your own budget. Calculating your ROI can show you just that.
Read on to learn how:
What is ROI?
ROI stands for return on investment and its one of the ending point of a digital marketing campaign. This is where you can really see how much your strategies paid off. It will also help you start planning for your next campaign.
Measuring ROI should always be a step in your campaign as it can help you determine which strategies are profitable and which are not. It can also give you areas to improve it.
This practice is known to be difficult to measure as some of your data that you may be working with is qualitative. But we're here to debunk that idea as measuring ROI is actually a lot easier than you think!
What exactly you should measure
To start measuring how profitable your efforts have been, start by the pinpointing leads and conversions. A lead is a person who may become a customer later on in the marketing process. These are people who have shown interest in your content or ads.
A conversion is what you would call it when a lead responds to an ad or an email. This moves them along the marketing funnel and has a greater chance of becoming a customer.
You should also take a look at how much a total customer is worth and how much they cost. This way when you find your total number of conversions you can determine how much money you made your business.
For online ads your company placed, you'll want to see how many people actually clicked on your ad. This is called your click-through rate. Here you will see how effective your ad was at garnering attention for your digital marketing campaign. These could be ads on social media or on websites.
Next, you'll look at how many customers completed your call to action associated with the ad. This number would be the amount of conversions the ad yielded. Now take that number and divide it by the total number of clicks the ad received and you will get your conversation rate.
When you learn how many conversions there were multiply that number by the average revenue each customer creates. This number minus cost of ad per person would be your ROI.
Blog posts are also a great strategy for your marketing campaign. Similar to the ad, you'll want to see how many people clicked on your blog posts.
When those same leads follow through on your call to action at the end of the post they become leads. When those same leads start purchasing products or services they become customers.
Now you will take the revenue generated by the customers and subtract the costs to create the post and nurture the lead. This will be your ROI.
More Tips For Your Digital Marketing Campaign
Putting on a campaign like this takes time and hard work. You'll need to create content, strategy, and goals to measure it all on.
Coming up with a goal for your ROI is a good way to start seeing how effective your work is being. For more tips on how to execute a digital marketing campaign check out our blog.
When strategically integrated with digital tactics Direct Mail is a viable option AND its ROI can be measured!
Digital is our thing, but River Avenue Digital knows that it takes a holistic marketing approach to make an impact no matter what your goals are. We often incorporate off-line tactics as part of our campaigns and understanding how to calculate the return on the client’s investment is critical.
The goal of measuring Direct Mail as a channel is to identify whether the investment in the program is generating a satisfactory return. Return can be measured as revenue or completion of customer objectives (contact forms, phone calls, etc.). The best way to measure this impact is via a list management process where the audience that completes the goals can be matched up with the audience in the Direct Mail list.
The method we use to measure the performance of Direct Mail is to by testing whether the Direct Mail piece affected customer behavior. This can be done via a randomized selection of a control group vs. an experiment group. We recommend that the control group consist of a random sample of 10-20 percent of the list. For Direct Mail, this is very effective because of the highly targeted nature of the campaigns.
Our analytics consultants developed the following methodology:
Let River Avenue Digital develop a marketing plan that drives results. Contact us today!
Arjun dreams of attribution models and wRC+. He is a digital marketing analytics whiz and you can follow his musings at @iamarjunkumble.