ROI, or return on investment, is perhaps the only real way to assess whether your online marketing campaign has been a success or money down the drain. It is only natural to expect tangible results for the hefty sums of money spent to keep your digital marketing endeavors afloat. Natural as it may be, it is definitely not an easy assessment to make. Here is a checklist of six sure-shot ways to measure ROI on your digital marketing operations:
- Number of people reached: The basic aim of a digital marketing strategy is to reach out to a wide base of target audience or potential customers with the click of a button. Therefore, assessing the number of people reached through a online marketing campaign is the best way to determine whether the ROI is positive or negative.
- Number of engagements: Are your target audience noticing your online marketing efforts? A clear indicator of this would be the number of engagements you generate through clicks, likes, shares, discussions, and comments on posts pertaining to your product or service. The higher the level of engagement, the better the ROI.
- Number of visits: The entire pitch of digital marketing is to increase traffic to your website. Naturally then, total number of visits to the main website is one of the clear indicators of how well a digital marketing plan is working, and thereby, an effective means of calculating ROI.
- Click to Visit Ratio and Bounce Rate: All clicks don’t necessarily result in visits. Therefore, it is important to know exactly how many of ad clicks are translating into actual visitors to your site. It is, thus, important to an appropriate PPC medium. For example, Facebook has low cost per click as compared to Google Adwords but in terms of drawing traffic to a website, Google Adwords is still the king. The second crucial factor to watch out for is the bounce rate. It determines the tendency among visitors to leave a website without having fully explored it. Let us say a user visits your website after discovering it on a social media site or through a Google search, and exits after browsing the homepage or landing page– without making any purchase or clicking on further links – the purpose of your digital marketing campaign has failed. Therefore, a high bounce rate is a clear indicator of poor ROI.
- Number of Conversions: This is a positive and one of the most critical factors to look at while assessing the ROI. It is also an easy to quantify parameter that never yields misleading results. Making purchases, clicking on links, completion of lead forms are some of the ways in which conversions can be measured, depending on the nature of your operation. A high conversion rate translates into a profitable ROI.
- Cost of Lead Generation: This is yet another highly quantifiable metric for assessing the ROI. An analysis of number of leads generated over a specific period vis-à-vis the amount of money spent on digital marketing during that period will give you the cost of lead generation. Being able to achieve a high number of leads at a relatively low cost accounts for a good ROI.