One of the toughest things about digital marketing, especially for smaller businesses, is to get a handle on exactly what their return on investment is. This is something which many have struggled with over the years and the reality is that there is no exact science behind this. We can, of course, gain a deeper understanding of our brand growth through survey and some metrics, we can see a spike in sales but that is not always to say that we have caused that through our paid marketing, so how exactly can we get to the bottom our ROI on paid advertising. The answer is you can’t, at least not exactly, but you can certainly employ tactics to give you a good idea of how well your paid ads are performing.
Email Marketing
Let’s get started with email marketing, a digital marketing strategy which many say provides the strongest return on investment. The general consensus here is that businesses can make up o $37 dollars on every single dollar that they spend, naturally, that depends on the size of the mailing list but this is the potential ROI. The best way to measure this impact is to add a link to certain products and offers which you have on, these links will be tracked and so you can easily see conversion rate, leads, and sales. This will give you a base ROI because there is no telling what more interest you will gain through simply promoting the brand.
Pay Per Click Campaigns
Pay per click such as Google ads offers a slightly easier way of telling how well your ad is doing. Here you have to remember that you are paying for every single click which your ad gets, even if it does not result in sales. In fact, this is why there is such a stress on getting this right because of many waste money on poorly run ads. The reason why this is a much easier ad to check the ROI of is that each user is tracked from the moment that they click the ad.
You will be able to see how many people put a product in their cart, how many left it and how many bought it. Subtract the overall cost of the ad from the number of sales you made on the product and you will have again, the base ROI. This is only the minimum as there is no telling whether that customer enjoyed the product and came back for more.
Social Media
Using the likes of Facebooks ads make it very easy to track if you are promoting specific products but if you are simply promoting your brand then the best that you can see is the number of customers who migrated across directly. The thing that skews the figures here is that someone may see your business and then load up a tab later on and visit your site.
Even if this user spends $1000 on your site, there is no way to know that the person was referred to by social media. Once again we can measure the direct ROI from those who went from social media to your site, and directly bought a product, anything beyond that is tough to measure.
What these minimum ROI metrics from Instagram ads, pay per click ads and email marketing can give you is a broad understanding of how well your paid ads are doing.
