What is the Return of investment on Digital marketing?
Return on investment simply
compares the profit that resulted from digital
marketing strategies to how much the campaign cost to create and deploy.
Ideally, you want as high an ROI as possible.
The return on investment
calculation, however, won’t mean much if you don’t have any objectives or
goals, have inaccurate numbers and data in your calculations, measure the wrong
key performance indicators (KPIs), or are
uncertain what you’re measuring.
If you are thinking about
expanding the business then you are travelling in a right path in planning to
invest in digital marketing but partnering with the right digital marketing
professionals.
Before calculating a campaign’s
ROI, consider the following:
1. UNDERSTAND
YOUR OBJECTIVES
You want to prove to management
that your digital marketing strategies successfully bring in revenue for the
organization. Marketers are drawn to the appeal of proving the ROI of their
work, but what if ROI isn’t the only metric your business should use in
assessing the success of your efforts? This is where it’s important to
understand your unique marketing objectives before you deploy and measure your
campaigns and strategies.
Not everything in your digital
marketing campaign will have results that directly show ROI. For instance, lead
generation and clicks can be counted, but they have no monetary value that
would illustrate ROI. If you measure
everything in terms of revenue, you’ll miss the true effectiveness of your
marketing efforts.
2. IDENTIFY KEY
PERFORMANCE INDICATORS
Your business is unique and
different from even your competitors in your market and location, and your KPIs
must reflect this. If you try to use the KPIs of other organizations, you’ll
end up with data that isn’t useful to your own.
Sometimes experimenting is fine
with new strategies and implementing new ideas while promoting business online but if you think
it’s the only strategy and only way, you might start to over spend the campaign
budget and exceed the limit of spending then you can’t reach the profits or sometimes
no profits at all.
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