It can be difficult to know where to start in creating a digital marketing strategy with the landscape forever evolving. But one measurement that remains consistently important is the return on investment (ROI) of marketing practices. Being able to accurately determine the value for money a marketing channel can produce is useful for deciding how much money to invest in each channel. Marketers who report on their ROI’s are 1.6 times more likely to secure additional funding for their next marketing campaigns.
ROI is simply calculated by measuring your revenue from the marketing channel, minusing the spend you initially used to find your net return (shown in the infographic below). You can then divide this by the initial spend and multiply by 100 to find the percentage ROI. 500% is a typical ROI which many marketing professionals consider to be decent.
The four of the most popular digital marketing channels are social media, email marketing, search engine optimization (SEO) and paid digital advertising. The metrics for tracking and measuring the ROI of each channel may differ slightly depending on the channel. For example, email marketing you may want to measure the open rate, click-through rate and leads acquired. But for SEO, you may want to measure keyword rankings, unique visitors and traffic.
The stand out ROI for digital marketing is by far email marketing. The average ROI of email marketing is reported to be 3600%. That means for every dollar spent, you’d see a return of $36. In order to achieve a high ROI for email marketing their are multiple tactics which you can apply to your campaigns. A/B testing is a common strategy used to asses multiple versions of emails in the email campaign. This can start small with subject lines and scale up to larger changes like the text or offers included in the email.
SEO is fast becoming a firm favourite for businesses to increase online presence. With SEO being an essential part of operating successfully online, it can also be utilised to boost awareness and sales for your brand. With Google constantly updating its search algorithm, its a long term investment with slower results than most other marketing channels.
If you want to find the most effective digital marketing strategy, your best option is to test what works best for your business depending on industry and budget. No two businesses are the same, so trailing what is most effective for your business is key to success.