Return on Investment for Various Digital Marketing Strategies

The measurement of the profit or loss that your business generates on the digital marketing campaigns employed by your business can be termed as the Digital marketing return on investment. In simpler words, it is the return you get in monetary terms on the basis of how much money you invested for the particular campaign.

It tells you whether or not you are receiving your money’s worth for your marketing channels. Where a positive return adds worth to your investment in the campaign, a negative return denotes the opposite. However, a negative return on investment does not particularly equate to wastage or destruction of wealth for the business as the method of calculating is not particularly foolproof. Moreover, the duration, type of marketing, among other variables also play an imperative role in the determination which can be highly subjective. 

return on investment

Measuring Return on Investment (ROI) is important as it provides direction on the amount to allocate, provides feedback and basis for evaluation and improvement for future purposes, the effectiveness of the campaign and marketing team, among other Once you’ve figured out which sections aren’t working as well as you’d want, you may work on improving them.

You may analyze these components of your campaigns and take active measures to enhance them. Knowing the ROI of various parts of your campaigns may help you better understand where your marketing money should be allocated for the greatest outcomes. It gives an insight on what is working well for the business, what is not and helps you to draft the marketing budget accordingly (insert link).

One of your primary concerns as a marketer is demonstrating the efficacy of your digital marketing efforts. Your employer needs real figures to back up your claims, therefore it’s time to evaluate your digital marketing ROI. But one thing to be noted: there isn’t a single approach that can properly capture your digital marketing ROI. It’s just that some of the tasks you do are difficult to define.

A generalised formula for the calculation of ROI on Marketing as per accounting terms is 

ROI = (Gains from investment – cost of investment)/(cost of investment) × 100

A few broad metrics that can be used to measure Return on Investment are as follows:

  1. Conversion Rate:

    If the aim of your marketing initiatives is to get people to convert, conversion metrics will show you how well you’re doing. This informs you what you’re doing right and where you may put your efforts to get greater outcomes and a higher return on your investment.When it comes to conversion rates, there are a few things you should keep an eye out for. Conversion rates by channel is one of them. Only half of the battle is won when you know where your traffic is coming from.You should also consider which channels convert the best. If you see that certain of your channels convert better than others, you might want to put more money into them to boost your ROI.

  2. Cost per Acquisition


    Your cost per acquisition informs you how much it costs to get a new customer on average. Divide your overall marketing expenditures by the number of sales generated to get your cost per acquisition. You can better comprehend your return on investment if you know how much it costs to gain a new sale. You have a negative return on investment if you spend more to attract a customer than they bring into your business. This means you should review your marketing initiatives and look for methods to reduce your cost per acquisition.

  3. Customer Acquisition Value


    Customer lifetime value is an important metric to consider when calculating your digital marketing ROI. This measure indicates how much the average client will spend over the course of their lifetime. Though initial client acquisition expenses are critical, employing this measure can help you gain a better picture of a customer’s entire worth. When you consider the long-term earnings you may expect from a client, you obtain a different perspective on the expenses of initial acquisition and your return on investment. Of course, you won’t lose every first-time consumer on the first try. However, being able to see beyond their first purchase provides you a more realistic picture of their return on investment.

Some methods to Improve ROI through Digital Marketing Strategies 

Search engine Optimization and Marketing

SEO will boost your website’s online exposure by improving its position in organic search results. More traffic and money will be sent to your site as a result of good SEO. Long-term benefits of this strategy include stable rankings, keyword targeting precision, brand adaptability, and trustworthiness. Another great advantage of SEO is that it is a cost-effective and efficient approach to increase your ROI.

Through sponsored adverts, these advertising tactics may put your company ahead of the competition. Because it generates rapid leads, it is a source of short-term ROI improvement. SEM, on the other hand, has the ability to provide long-term benefits including improved exposure, audience development, accurate targeting, and high-quality lead creation.

Social Media and Email Marketing 

A good social media marketing strategy will increase your results by building your brand’s online reputation. Paid ads on social media can have a huge impact on your ROI. Its advantages are that it is an effective and affordable brand recognition tool with a low barrier to entry. 

Email marketing is a safe bet for increasing ROI. The data shows that 67% of all companies consider it their main source of income in digital marketing. Email marketing uses promotional offers or newsletters to build subscriber lists. This channel will link your customers with your brand and also attract new potential customers. This simple and inexpensive digital advertising strategy has the advantages of traceable data and an ROI approach.

All the aforementioned aspects such as SEO optimization, marketing strategies, etc. are the specialty of our digital agency Deecro. For clarification or guidance, we offer a wide range of services: Data and Insights, Public Relations and Public Affairs, Advertising and Branding, Communication, Customer Relationship Management, Planning and Strategic Media Purchases, etc. Digital Marketing and Social Networks, Direct and Promotional Marketing, Experimental Marketing to not only expand your reach and reach new clients, but also to process other auxiliary businesses and we will be happy to help you!

Leave a Comment

Your email address will not be published.