How to Measure Digital Marketing ROI: Metrics That Matter

How to Figure Out ROI for Digital Marketing

You can’t just look at how much money different digital marketing efforts bring in and then compare that to how much they cost.

Conversion is not the end goal of all efforts.

Some efforts are meant to make people aware of something. When making their marketing funnels, some try to get customers, while others try to get leads.

In the end, how you measure the return on investment (ROI) of your digital marketing will rely on what your goals are.

Google Analytics gives you so much information that it might make your head spin.

So, here is a list of the most popular digital marketing metrics used to measure return on investment (ROI):

1. Rate of Change

One of the most common ways to track return on investment over time is to look at the conversion rate.

If the goal of your marketing efforts is to get people to buy something, conversion metrics will show you how well you are doing.

Then you’ll know what you’re doing right and where you can put your resources to get better results and a better return on your investment.

There are a few things you should look for when it comes to exchange rates.

One of these things is the rate of conversion by route. Only half the battle is won when you know where your traffic is coming from.

You should also check to see which sites are getting the most sales.

If you find that some of your channels work better than others, you might want to put more money into those channels to increase your return on investment (ROI).

conversion channel

You should also look at the rates of conversion by gadget.

If you find that one device doesn’t convert well but gets a lot of traffic, it’s time to look at your ads for that device again.

For instance, mobile brings in a lot of business a lot of the time. But it’s hard for many brands to turn mobile users into customers.

When you see this happening in your own business, it’s time to rethink your digital marketing efforts for mobile devices.

changes based on device

2. The price per lead

If the goal of your digital marketing effort is to find new leads for your sales team to close.

Then you need to figure out how much each new lead costs you.

This will help you figure out how much money you are making back from that effort.

cost per lead

To figure out the cost per lead, split the total amount spent on an ad or campaign by the number of leads that can be linked to that campaign.

If the cost of each lead is more than what you can make from finishing it, you are not getting a good return on your investment.

3. Rate of closing leads

It’s also important to keep an eye on how many leads turn into sales. This may already be something you do on your own.

But it’s likely that this information isn’t part of the online stats you’re gathering.

Keeping an eye on your lead close rate gives you a better idea of how effective your digital marketing efforts are.

Which helps you get a return on your investment.

Compare your lead close rate to the number of leads you’re getting.

This will show you how well each of your marketing efforts is doing.

You can also use this knowledge as a starting point for new digital marketing campaigns.

If you find that new efforts are closing leads at a lower-than-average rate, it may be time to make some changes.

You should also keep an eye on this measure if you have a salesperson or a business development manager.

This number will help you figure out if what they are doing is working or not.

It shows you how many of the leads they get actually turn into sales.

Even though there are other ways to measure how well they do their jobs, this lead close number is one of them.

4. Cost Per Acquisition

Your cost per purchase tells you how much a new customer costs on average.

To figure out the cost per acquisition, split the total amount you spent on marketing by the number of sales it brought in.

cost per sale

When you know how much it costs to make a new sale, you can figure out how much money you’re making back.

You have a bad return on investment if it costs more to get a customer than they are worth to your business.

This means you should look at your marketing efforts again and figure out how to lower your cost per acquisition.

5. Average Order Value

Average order value (AOV) is another important measure that can help you better understand your digital marketing return on investment (ROI).

This measure tracks how much money a customer spends on average when they place an order.

To figure out AOV, split the total amount of money made by the number of orders.

Every business wants the number of orders to grow over time, but it’s also important to keep an eye on how much each order costs on average.

Even if you can only improve the average order value by a small amount, you can make thousands of dollars more.

Increasing AOV is often as easy as giving users a better experience or showing up-sell and cross-sell chances better.

6. Customer Lifetime Value

Customer lifetime value is an important way to measure your digital marketing’s return on investment (ROI).

This measure tells you how much money a typical customer will spend over the course of their lifetime as a customer.

Even though the cost of getting a new customer in the first place is important, this measure will give you a better idea of…

..understand the general value of a customer.

customer’s bottom line

Say, for instance, that it costs you $100 to get a new customer.

And the first thing that customer buys is worth $100. At first look, this doesn’t seem like a good way to make money.

But if this same customer spends $100 every month for the foreseeable future, then the original $100 investment was well worth it.

When you look at the long-term profit you can make from a customer, it changes how you think about the cost of getting that customer and your return on investment (ROI).

Of course, you won’t lose money on every person who comes in for the first time.

But you can get a better idea of ROI if you can see beyond their first buy.

ROI Using Digital Marketing Strategies
You can use the general metrics listed above to measure the return on investment (ROI) of your marketing efforts.

But it’s important to remember that the metrics you use to measure the success of your efforts will depend on…

…what strategies you use in your projects.

You can easily measure the ROI of email marketing with different metrics than you might use for social media.

Remember that the metrics you use to measure the return on investment (ROI) of different marketing platforms will depend on your goals.

With that in mind, here is a short list of measurements you can use to measure the return on investment (ROI) of your digital marketing strategies:

Email: Open rate, click-through rate, bounce rate, unsubscribe rate, sales, and new leads.

Social media engagement rates, clicks, click-through rates, conversions, new friends or followers, and leads.

Landing pages: traffic, new visitors, returning visitors, total page views, time spent on page, actions taken, and sales.

Traffic, clicks, time spent on page, number of new visitors, number of returning visitors, actions taken, and sales are all things that blogs track.
Compare one year to the next

You shouldn’t compare your ROI data from month to month when you’re comparing it.

When you compare one month to the next, you don’t take into account things like seasonal demand.

Instead, look at how things have changed from year to year. These will help you see how your digital marketing efforts are getting better over time.

digital marketing ROI happiness

Most businesses aren’t even sure if they’re happy with their return on investment (ROI). They probably don’t know how to measure it.

4 Ways to Increase the Return on Investment (ROI) of Your Digital Marketing

Once you start measuring the return on investment (ROI) of your digital marketing, you can start to look for ways to improve.

Here are a few things you can do to make it easier to measure ROI and improve your company’s bottom line:

1. Set your goals out in the open right away.

As we said in the part about how to measure ROI, you need to know what your…

…are before you can start to measure digital marketing return on investment (ROI).

If your goals aren’t clear, you might not be using the right measures to track your return on investment (ROI).

The first step in measuring and improving the return on investment of your digital marketing is to set clear goals that…

…help you get the results you want.

Avoid goals like “increase awareness” or “make more conversions” that aren’t clear or well-defined.

Instead, make sure your goals are SMART, which means they are clear, measurable, achievable, relevant, and have a deadline.

smart goals

Make sure that all of the digital marketing goals you set are SMART.

You can do this by starting with a goal that isn’t clear and making it more SMART.

Say, for example, that the goal of a certain promotion is to get more people to buy.

You should make sure that this is clearer and easier to measure.

“Convert 20% of leads into customers” might be your goal. Then, you need to make sure there is a deadline for this.

So, putting a date like “in quarter 3” or “in 6 months” makes sure you have a plan to reach your goal.

As for what is possible and what is important, that relies on your campaign.

Make sure that the number you choose can be done in the time you have given yourself.

Also, make sure that the goal you choose fits in with your overall goals and the digital marketing strategy you are running at the time.

Before you start a campaign, it’s a good idea to make sure you’re headed in the right direction by setting SMART goals.

You won’t be able to measure your ROI correctly if you don’t have clear goals.

And if you can’t figure out how to measure ROI, you can’t find ways to make it better.

2. Use KPIs that are directly connected to your goals.

Once your goals and objectives are clear, you need to make sure that the KPIs you choose are in line with them.

KPIs, which stand for “key performance indicators,” are the most important ways to track your progress towards these goals.

The most important KPIs for SEO will be different from those for email marketing or social media.

If you don’t have key performance indicators (KPIs), you won’t know how close you are to reaching your goals.

digital marketing KPIs

When making your digital marketing KPIs, make sure to keep the following in mind.

Make sure that the KPIs you pick fit with the goals you’ve set.

For instance, if your goal is to get more conversions, you might use sales-related data to track your progress towards this goal.

By keeping track of success with KPIs, you can see how close you are to reaching your goals.

KPIs don’t just help you keep track of your campaign’s progress towards its goals. But they let you tell your marketing team what you expect from them.

With KPIs in place, you can make sure that no one gets confused or confused about what you are trying to do.

Your marketing team knows exactly how the success of the campaign will be measured, so they can work on improving these measures.

3. Try out different ways to target, what to offer, how often, and what to say.

Testing is a key part of improving your digital marketing return on investment (ROI).

It not only helps you improve the results of each digital marketing strategy.

But it can also help you learn new things that you can use in your digital marketing plan as a whole.

Testing is the only way to be sure which parts of your digital marketing efforts are making a difference in your success.

You can put different parts of your digital marketing efforts through A/B tests to see which ones work best.

Every part of your campaigns, from email marketing to the content you share on social media to PPC ads, can benefit from careful testing.

When you do an A/B test, you should test only one part of your promotion.

When trying a landing page, for example, you might start with the headline.

In one test version, the copy for the lead is changed, while the other stays the same. Then, put each one to the test to see which one works best.

Testing on AB

When doing an A/B test, change only one thing at a time so you can figure out which variable is affecting speed.

Once you know which parts of your marketing campaigns work best, you can make changes to your present campaigns and plan for future ones.

This is true for more than just the same kinds of efforts.

You can make changes to different platforms and tactics for different campaigns.

For example, let’s say you find that your PPC ads or Facebook ads work best with a certain type of message.

Then, you might not only change the message of your PPC ads but also carry these changes over to…

…other parts of your internet marketing, like marketing messages sent through email.

4. Identify and seize important chances for improvement.

Not just keeping track of your chosen measures over time is not enough.

If you want to really increase ROI, you have to change your efforts based on what you find.

The most important part of measuring your digital marketing strategy is not the data itself.

When you look at and analyse this data, you’ll learn important things that will help you grow your brand.

After you’ve tried some things out and kept track of measurements over time.

You will start to see some patterns or places where you can make money.

You must make the most of these chances to get better.

Based on what you find, run new tests to find new ways to make your efforts even better than they were before.

For example, let’s say that one of your measures is conversions by device.

When you look at this metric over time, you find that younger age groups and other groups like them tend to use mobile devices.

If you want to increase your ROI by getting more people to buy on these devices.

You might want to think about making your mobile campaign messages and deals more appealing to this part of your target audience.

Some other things you might look at when analysing your data and looking for new possibilities in the different channels that…

…you’re using for ads, as well as the time of day or day of the week when people tend to convert.

By keeping an eye on these things, you’ll be able to optimise your content marketing or…

…start running ads as part of your internet marketing efforts.

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