How to Measure Digital Marketing ROI in 6 Steps
“Half of the money I spend on advertising is wasted; the trouble is I don’t know which half.” John Wanamaker didn’t have big data and cloud storage to prove the worth of his advertising. What’s your excuse?
Here are six steps to proving the value of your digital marketing:
1. Define a Tangible Goal
“Make more money” isn’t going to cut it. Your goal must be quantifiable. You want to increase sales. By what percent? You want to reduce energy. How many kilowatts?
2. Understand Your Sales Cycle
As much as we would like to think we have a 100% close-rate, most don’t. If the goal is 15 more sales per month and your business has a 5:1 close-rate you actually need 75 additional leads each month. The number of leads is the digital marketing objective. This data will also help define other key performance indicators.
Digital marketing goes far beyond clicks on ads, which is why your business needs a digital strategy. Social media, paid search, digital video and SEO are a few examples of digital marketing tactics that work together to drive targeted, qualified traffic to your company’s website.
4. Make Your Website Work Hard
Your digital marketing strategy is sending your target consumer to the site. Now what? The website should be built to push users down the funnel. In order to do that, the user needs to know what you want them to do. What is the website’s call to action? If it is an online sales process, point them to a “buy now” or “enroll now” option. If your sales are completed offline, what information do you need for the user to become a lead?
5. Track & Optimize to the Conversion
If you are basing digital performance on the number of clicks or click-thru rate, you’re behind. Optimizations to digital tactics should be based on conversion metrics, which are provided by implementing small pieces of code on your website and actively analyzing website data and the users’ actions.
Just like any other investment, you have to put money into digital marketing to get a return. Say you invested $5,000 in digital marketing for the month and each of your sales generates $500. It’s working and the 15 additional sales you picked up cover the cost and produce a positive ROI of $2,500 for the month.
Albert Einstein once said, “Not everything that counts can be counted, and not everything that can be counted counts.” Digital offers more analytical insight than any other form of marketing but it also provides benefits that cannot be quantified.
If your goals are clearly defined and your strategy is creative and sharp, your business will see benefits far beyond what can be tracked online.