ReportingWhat is digital marketing ROI and why does it matter for your Brisbane Business?

What is digital marketing ROI and why does it matter for your Brisbane Business?

In the simplest terms digital marketing ROI (Return on Investment), is the measurement of revenue attributed to a marketing activity against the cost of that activity.

Sounds easy, doesn’t it?

But what about when you have multiple marketing activities across several channels? What if you aren’t measuring sales? And why has Facebook gone and changed everything AGAIN?

Actually – attributing and tracking marketing ROI is one of the most essential, but also most elusive forms of data to make concrete and is one of the most valuable services we give to our clients.

Setting benchmarks and the right goals for your marketing activity and knowing how to measure these, requires time, experience and a certain degree of technical know how that many business owners do not have. But – having access to this data and understanding it is the key to making smart, informed decisions about how to get the most out of your marketing dollar.

How is digital marketing ROI data used?

For small businesses, knowing where your marketing money is best spent is the most valuable use of ROI data. You can use the results to optimise your marketing strategy in an informed way, rather than just guessing and hoping for the best.

Most business owners know they need to use digital channels to market themselves and have a hunch that it’s working, but wouldn’t be able to tell you for certain what activities work best and why.

Marketing ROI data gives you the information you need to determine which channels are most effective for your business, and how those channels will often work together to produce a result.

Being able to see clearly on a campaign-by-campaign basis what’s working and what’s not, enables smarter decision making when you’re setting up marketing budgets, justifying marketing spend to higher authorities and over time, allows benchmarks and success measurements to be established.

How to calculate your digital marketing ROI

To measure your marketing ROI across the digital channels you use, you need to determine a clear set of goals for each of your marketing activities (what to measure and how to measure it) and your costs over a set time period.

At its most basic level – the calculation looks like this:

(Return (sales) – Investment (Cost)) divided by the Investment = Your Marketing ROI

ROI is usually expressed as a percentage, so multiply your result by 100.

Most small to medium businesses will use a combination of the following to market themselves, and here are some ways that we measure results in these activity areas:

  • Search Engine Optimisation (SEO) – measure using number of important keywords that you rank for, or more importantly, organic traffic growth.
  • Pay Per Click Advertising (PPC) – product-based businesses can measure with sales tracked from ads. Service based businesses with leads (yes, this is harder to attach a value to!)
  • Social Media – track sales, visits to your website, post engagement, growth in followers/reach.
  • Email Marketing – measure using opens, clicks, website visits and sales.

The kinds of goals that you measure will be different for each area of activity and for each individual business, and this is where the data can get slippery…

If you feel yourself nodding off about now, but you still want to be able to calculate your ROI, you should probably –

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