In today’s online world, consumers are now presented with, engaged with, as well as make purchases from organisations online. Digital marketing isn’t your business’ magic marketing bullet unless it is monitored often, measured in addition to constantly tweaked. One of the absolute best ways to measure the effectiveness of digital marketing efforts is through calculating its return on investment, or ROI.
Digital marketing campaigns have to be treated as investments. The best way to tie in a digital investment to overall performance is by determining Return on Investment (ROI). However, with so many variables and places to attribute marketing results, it isn’t as simple as you might think.
As a digital marketer, one of your main worries is how to show the effectiveness of your digital marketing efforts. In order to prove it, your boss wants solid numbers – so it’s high time to calculate your digital marketing ROI.
One Size Doesn’t Fit All
There’s no exact method which will capture your digital marketing ROI perfectly. It’s just tricky to quantify a number of the activities which you engage in. Having said that, you are still able to have an approximate value of your digital marketing ROI. This gives you insights into the efficacy of your marketing efforts. Apart from giving a figure to your boss, it assists you to adjust your marketing strategy in order to improve results.
How To Calculate ROI in Digital Marketing
ROI simply compares the profit which resulted from a digital marketing campaign to how much the campaign cost to create as well as deploy. Preferably, you want as high an ROI as possible.
The fundamental ROI calculation is: ROI = (Net Profit/Total Cost)*100
The ROI calculation, however, won’t mean much if you don’t:
- Have any aims or goals,
- Have erroneous numbers and data in your calculations,
- Measure the incorrect key performance indicators (KPIs), or
- Are uncertain what you’re measuring.
Understand Your Objectives
You would like to prove to management that your digital marketing strategies successfully bring in revenue for the organisation. Marketers are attracted to the appeal of proving the ROI of their work. However, what if ROI isn’t the only metric that your business should use in gauging the success of your efforts? This is where it’s very important to understand your unique marketing objectives before you deploy and measure your campaigns as well as strategies.
Ensure Your Data Collection Methods Are Clean
Your data collection system and methods need to be able to collect data cleanly. If there are any hiccups or discrepancies in how the data is entered, collected, relocated, or calculated you will end up with data as well as information which skews your KPI and ROI numbers. Incorrect KPIs will not be useful in assessing how effective your digital marketing efforts were in finding, attracting, and converting online customers.
Not all in your digital marketing campaign will have results which directly show ROI. For instance, lead generation as well as clicks can be counted, however they have no monetary value which would illustrate ROI. If you measure everything regarding revenue, you’ll miss the true effectiveness of your marketing efforts.
If you would like to become a digital marketing guru then you need to sign up for our Digital Marketing Course. Follow this link to sign up.
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