If you’re investing time and money in digital marketing, measuring your return on investment (ROI) is a must. Here’s ten easy ways to calculate the ROI on your digital strategies.
Reload Media’s ROI guru Paul Goldston says businesses shouldn’t be scared about calculating the ROI on their digital strategies, as they actually allow for greater accountability than traditional marketing strategies.
“Digital strategies give businesses so much more control over what information is put out about them, where that information is going and who that information is reaching… they can be tracked easily and their ROI can be calculated almost immediately,” he said.
Here are Goldston’s 10 tips for calculating ROI:
1. Know Your Objectives and Targets
It’s important to consider the business reasons as to why you are implementing any marketing activity. From here, you can set specific, measurable, attainable, realistic and timed objectives relating to this overarching business goal.
For example, a travel agency might decide that they need to receive more enquiries through their website. From here, the agency can work backwards to figure out the average value of each enquiry to the business based on the amount of enquires that resulted in sales in the past.
By being diligent and looking at the numbers, the company might then be able to say:
“…we are able to spend up to $50 per enquiry in marketing dollars in order to remain profitable”
The power of this simple pre-launch work will immediately allow a marketer to understand if the channels they are investing their budgets in are performing or not.
2. Track Everything
In order to get a clearer picture of which marketing channels are providing a positive return on investment, it is imperative that marketers always ask themselves ‘how are we going to track this?’ before they move forward with any campaign.
Today, it is very easy to track all of your different online traffic sources (SEO, PPC, Social Media Marketing, Email marketing, Banner Advertising etc). What many marketers may not know is that it is also very easy to integrate digital tracking methods into their offline mediums. There is always a way to track the direct response of your customers.
3. Use Google Analytics
Google Analytics is an amazing, free tool provided by Google which allows marketers to decipher not only how much traffic is coming to their websites, but also, how many people are buying or enquiring on your website, which traffic sources are creating the most conversions, which pages are performing the best and even which marketing activities are performing well together. If you do not have this installed or cannot login to your analytics account, this should be your number one priority after reading this!
If people are able to purchase your product or service online through your website, be sure to install an e-commerce module for Google Analytics so you are able to track exactly how much revenue each traffic source is generating for you.
5. Spend Money on Your Web Presences
I cannot stress enough how important your web presence is. Never skimp on a website in order to afford a television commercial. If a good portion of your market is likely to visit you online at any stage in their purchase cycle, there is no sense in spending huge amounts of money on expensive advertising campaigns if your website, landing page or mobile site is not yet performing.
If you’re investing time and money in digital marketing mediums, measuring your return on investment (ROI) is a must. Here’s ten easy ways to calculate the ROI on your digital strategies.
6. Use PPC Advertising
PPC or Pay Per Click advertising is a payment method in which the advertiser only pays for the clicks that their ad receives. This is an extremely powerful form of advertising as it allows a marketer to see exactly how much their advertising is costing and how much revenue said advertising is generating in return. PPC marketers can calculate what a single click is worth to a business and then optimise their bidding in order to ensure that they never pay more per click than what they are likely to earn for that click.
7. UTM Tracking
UTM tracking is a very quick and easy way for marketers to turn a separate marketing activity into its own traffic source in Google Analytics. All marketers need to do is append a few simple variables to the end of a URL. From here, any traffic that hits their website through this URL will be grouped into an independent traffic source within Google Analytics.
Using this tracking method, marketers can measure how much traffic and revenue a newspaper ad, an email newsletter or even a single tweet created for their business.
8. Take Risks/Change the Norm
I’ve found that many marketers continue to use mediums that aren’t necessarily earning them any business, simply due to the fact that they have ‘always done it this way’.
If marketers are armed with the knowledge of which mediums are generating them the most business, it becomes much easier to move budgets towards those continually performing mediums. However, if a marketer does not posses this evidence, it becomes difficult to convince any higher ups to take a risk on a different medium.
9. Integrate Your Messages
Some of the best campaigns we’ve managed have had an integrated offline and online message. We know that up to 70 percent of people use search engines during some point in their purchase cycle. We also know that if a television ad cuts through to an audience member, it is highly likely that their first action will be to search for the advertised service or product on Google or other search engines.
It is for this reason that you not only need to be present on the search engines if using offline advertising, but also, your message within these search engines and on your website should to be reinforcing your offline message.
10. Ask Questions
If you are outsourcing some of your advertising to suppliers, be sure to ask questions about what your advertising dollars are achieving. Your agency should be able to answer how much return your advertising dollars have made for you or, at the very least, how are you going with regards to reaching your advertising objectives.