It always amazes me when working with new clients, the fear on their faces when the question – ‘What is your ROI?’ is mentioned.
I guess from an early on I had it drummed into me that you must be able to show your return on investment to all marketing activities.
Is our marketing working?
ALL CEO/CMOs ever
Don’t get me wrong, it is not always positive, but at least by measuring your activity you know what your marketing activity is doing.
If the mere mention of ROI strikes fear into you, it need not do.
Let’s break it down and see if by measuring ourselves with ROI top of mind, we can drive our digital marketing performance forward.
How to calculate ROI?
ROI = (Current Return/Profit – Marketing Spend)/Marketing Spend
Example £1500 – £1000 / £1000 = 50% ROI
How can ROI help you make better digital marketing decisions?
So the basics sum is pretty simple and shows us the value of our digital marketing activity as a whole.
Hopefully your digital marketing activity breaks down to its individual channels
- PPC
- Display
- SEO
- Social
- Affiliates
You may be using some, if not all these channels as part of your digital marketing activities.
Some of these channels are easier/quicker to measure ROI than others.
PPC / Display
So PPC and display activity is quite simple to measure as we know our ad spend.