10th Jan 2019

How to Track the ROI of Your Digital Marketing

Many online business owners find it difficult to ascertain if their marketing campaigns are boosting their business. They may feel they are tracking the outcome of their investment but are getting incorrect results. Tracking the ROI of your Calgary online marketing may seem overwhelming. We are going to help you understand what ROI is, why it invaluable to online marketing.

What is ROI?

ROI is an acronym which means return on investment. In this case, we are talking about the return on investment from the marketing strategies employed by a business unit. As with other forms of marketing, it is very essential to Calgary online marketing. It is used to measure value, letting you know if your marketing efforts are making you money!

A simple ROI calculation that considers your marketing spend and generated revenue can be determined by using the following formula:

Marketing ROI (%) = [(Generated revenue – Marketing spend) / marketing spend] * 100

The factors involved in your marketing campaigns will affect these calculations. The value derived from this basic calculation is a reflection on your marketing outcome. A positive value describes how well a campaign is faring while a negative value will indicate that your Calgary online marketing strategy needs to be adjusted or discontinued.

Why ROI Works Well for Online Marketing:

No doubt ROI is important in determining if the invested money is well spent. Calculating ROI is especially successful when it comes to online marketing. Granted that it is done for an extended period of time. The approach is taken to determine the ROI matters and in most cases will determine your online marketing outcome.

Online marketing yields different results and this makes identifying your marketing goal very important. A campaign can be aimed at boosting e-commerce sales, others might be for brand awareness or even consultations. These targets vary depending on the needs of the brand. So, determining the target of your campaign is a good place to begin when tracking your ROI.

Two basic metrics are used in calculating ROI which includes the cost to carry out a campaign and the outcome. Leads, A/B test results and conversion rates are very important when tracking the ROI as they are metrics directly linked to the goals of the business which includes the generation of profits and revenues.

Such tools as Google analytics are very useful in evaluating and tracking the marketing exploits carried out by a brand. They give a better understanding of the value of the campaigns adopted by your business.

These techniques work well for online marketing because they are easy to use and when adopted they improve the strategies of your business going forward.

Why it is useful to track ROI:

ROI is particularly valuable for tracking short term campaigns.

The amount of insight gained determines the effectiveness of your marketing, providing you with accurate figures which will steer your marketing efforts in the right direction. Also, the figures garnered from such insights will enable you to make key decisions with regards budget allocation. But are ROI’s only practical for tracking short term campaigns and what marketing strategies has the best ROI? Here are some important points to keep in mind:

Short term

The ability to draw people to your services and products is vital for short term online marketing ROI. Another factor that matters is the conversion of such leads into sales. When your marketing campaign doesn’t convert to sales, your approach isn’t successful in the short term.

Most marketers are mainly concerned about short term results because of the investment being made on their marketing exploits. Short term campaigns result in positive ROI which any business will want. Paid advertising which has been tried and tested by many online marketers offers good ROI in the short term as the sales made are the only lasting value it offers. Although trickier to measure compared to direct advertising, social media marketing is another feasible marketing strategy that can be embarked upon over a short time frame. When implemented properly, email marketing which has been identified to be the internet’s highest ROI marketing strategy especially when a brand has a strong email list.

Long term

Campaigns that support long term brand building are quite different from the short term ones. Many business owners shy away from such strategies but these strategies remain valuable. Content Marketing and SEO requires time and investment but the exponential results obtained over time offers a more lasting ROI value.

No doubt, every business is put in place for profit making. Your online marketing strategy will offer a good ROI when carried out effectively either in the short or long term, the approach taken really depends on what you perceive to be good ROI.

Need a hand with your Calgary online marketing? We can help. Click here to learn more.