How to measure Return On Investment in digital marketing

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Digital marketing strategies of your business must include many media avenues such as social media, website improvements, and SEO. These channels must be tracked and analysed to decipher your Return on investment (ROI). ROI is the sum of net profit/ cost of investment X 100. It shows if a business’s investment resource has been spent efficiently or the investment plan is not performing well enough. This resource can be money, time, effort, research etc. ROI Is the measurement of your investments to see of you get more from what you put in.

For digital marketing, you will need to analyse if your receiving a good profit from digital marketing investment. This measurement is also helpful for monitoring what digital marketing channel is working best and what needs to be improved on. ROI measurement provides a deep insight into your online presence and if this is converting well.

Social media and return on investment

  • No. of comments, retweets and shares show that people are engaging in your digital content and search engines favour this.
  • This improves your visibility which can lead to more organic traffic
  • Twitter and Facebook have tools to help you keep track of your social media traffic and ROI.

SEO and return on investment

  • Google analytics is a great tool for tracking what’s happening on your website
  • It enables you to set goals to track visitors which is vital  for good ROI analysis.
  • The click through rate (CTR) and conversion values such as online purchases, direct enquiries and completed surveys etc. can also be tracked and used to calculate ROI
  • The CTR is the proportion of visitors who click on hyperlinks within a text. If your content provides them with the information they were seeking, then clicking through will be more likely. Your page will optimise and rank better as search engines will know it was a useful page for visitors.
  • Look at your spending for SEO services compared to conversion value you get from organic traffic for your ROI

Some marketing initiatives will result in low ROI so these will need to be improved on; this is a major aspect of ROI analysis. Knowing what strategies are working or not will save you money in the long run. Aim to not keep investing in an area of marketing that provides no ROI because you haven’t assessed it. A large part of marketing is deciphering if the investments are working for your business, and adapting the investments accordingly.

Businesses shouldn’t ignore ROI analysis because without it you will not know what strategies are working for your business and converting to your goals. Determine how much revenue a strategy helped generate compared to the cost of strategy; this is the best way to measure ROI.

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Stephanie Brown
I'm a digitally inspired, e-Business professional. I write about digital marketing, social media and how psychology impacts modern day online buying behaviours and how people do business on the web.
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