ROI (Return on Investment) is a much-known term in the world of marketing. It helps you to estimate your money’s value from your marketing camping.
If you are not fully aware of it just dig into this article to understand why it is important to learn and improve your campaigns.
How to Calculate ROI
The most basic method to calculate ROI for digital marketing is to measure the metrics that are tied directly to profit and revenue. A general mathematical equation I to calculate ROI is as follows:
Well in the context of digital marketing soft metrics are also taken into accounts like brand impressions, purchase influence, website visitors, and download. These metrics also generate a positive outcome.
Challenges with Marketing ROI
Marketing is a long -term process which leads to sales growth along time through multiple aspects. In the starting period of a campaign, the ROI may be very low.
But as the time goes on sales growth start increasing and the collective ROI of the campaign will start rising.
Another challenge comes up in digital marketing is that campaigns are designed for more than just generating sales.
Weak ROI figures are generated by adding more soft metrics i.e. social media likes by the result oriented marketers that may not necessarily generate sales in future.
Tips to measure ROI
Usually, the approach of calculation of ROI is limited to focus on end results. There is a variety of other important factors that should be kept in mind. Here are some short but important tips to measure ROI:
1-Set goals for campaign
My first tip is set to clear and vague goals for your marketing campaign. These goals should go beyond an estimated sales revenue achievement. Create KPI related to the goals.
2-Analyze your Metrics
Statistics require interpretation by skilled analysts. Use a dashboard that allows users to have a broader insight of the metrics. An effective dashboard let users create data visualization and generate ad hoc reports.
Check our dashboard solution for your Digital Marketing campaigns.
3-Optimize Market Performance
Associate some compensation to metrics to ensure that marketers try to optimize market performance to achieve higher level to achieve reimbursements.
4-Understand the Complexities
For ROI calculation of digital marketing also consider the complex set of activities and link among those activities that generate positive ROI. For example, if you focus on building a platform to communicate with customers for your product may backfire in the case of the failure of a product.
5-Predictive Analysis
To use big data to link the factors that influence the digital marketing ROI drive a predictive analysis approach. It builds models to predict the future sales and the revenues associated with it.
Bottom Line
ROI of the digital marketing campaign ultimately shows in the form of high sales. So it is a good practice to run your calculations on regular basis throughout the campaign as the result takes the time to be in your favor. ROI is the part that matters most for the business.
