What is ROI?

ROI is Return on Investment.

This is actually not a new term, as entrepreneurs and the like have been using it for decades to describe the measurable success of marketing and advertising.

Before there were established metrics for digital marketing, anyone could claim themselves as a “digital marketing guru” and sell desperate business people a variety of un-measurable methods of digital marketing.

That era was like the Wild West– self-acclaimed gurus were essentially scamming businesses, just hauling in money without any real knowledge of what they were doing… because no one really knew what they were doing when it came to marketing online without any way to track or measure it.

Fortunately, that era has passed and we now have far more ability to measure the success of our digital marketing efforts as well as a wealth of data to support the marketing choices we make. But…

 

Measuring Digital Marketing Can Be Difficult

Nobody wants to, or should, throw their money at digital marketing without being able to later evaluate the ROI. Yet despite improved metrics, businesses still experience difficulty when it comes to measuring ROI as it relates to digital marketing.

90% of global marketers are not trained to calculate ROI and 80% struggle with being able to properly demonstrate to their management the business effectiveness of their spending, campaigns, and activities (The Fournaise Marketing Group, 2014).

Between content marketing and SEO, social media marketing, and online ads, it can all get tricky to track. This is in part due to the fact that we try to track our digital marketing with the same traditional methods that we use to track traditional marketing– like TV ads, radio, newspaper, etc.

There are far more factors involved in digital marketing and it can get very confusing when trying to measure the new ways with the old methods.

A Simpler Measurement

It’s far easier to measure ROI for digital marketing by calculating the revenue to cost of marketing ratio.

For a good ROI ratio, we recommend 5:1. This means that for every one dollar spent on marketing, you yield five dollars in sales.

What should count into this ratio?

  • Cost of content production
  • Pay-per-click ads
  • Display ads
  • Social media ad campaigns
  • Cost of outside marketing and ad agencies

Measuring in terms of a ratio makes it far easier to determine whether your digital marketing efforts are worth the cost or not. If you only make a 2:1 ratio, for example, you’re only really breaking even. In that case, your efforts might not be worth it.

That being said, not every marketing effort can be measured perfectly. Oftentimes content can generate leads months after the content is published. With this in mind, you can see how this might be difficult to track.

This is why the ratio is ideal for measurement. It’s ongoing, it’s all-encompassing, and it’s simple.

There Are Tools to Help You

You don’t have to stress over measuring your ROI. Analytics software and software programs like HubSpot, Marketo, and Google Analytics all provide tools for you to more easily measure ROI more efficiently.

So create an ROI ratio goal for your business and focus your marketing efforts on achieving this goal. This will be far less stressful on you and make your digital marketing efforts that much more justifiable.

CommCore Marketing can help you measure your ROI and improve the return on your marketing investments. Reach out to CommCore today.

On Budget? Here’s Three Ways to Spend Those Marketing Dollars

When you’re on budget and you have a bit more time to focus on marketing, there are several things you can do to grow your business’s reach.

  1. Outsource if you don’t have the time:
    It’s easy to get caught up in work for our clients, so wouldn’t it be easier to have someone else do our own marketing work? Hiring in someone to do those odd jobs that we don’t quite have the time to do is a great way to get things done. College students and recent graduates are great candidates for this type of work because they are eager to gain experience and eager to make money. Basic marketing does not require a lot of experience therefore you don’t need to hire someone who will cost you an arm and a leg. And, younger people are already adept at using technology and social media.
  2. Focus on Social Media:
    In this day and age, it is absolutely imperative to have a web presence. Nearly everything is done online now, so if you can’t be found on the web, it’s as if you don’t exist. Three of the most important social media outlets to be on are Facebook, Twitter, and LinkedIn.

    1. Facebook is such a multi-faceted network that allows people, businesses, organizations, events, news, and campaigns to be followed and interacted with. You want to be not only on Facebook but active. Even the smallest interactions on Facebook remind people that you are there, and that has far more impact than not being online at all.
    2. Twitter is as close to live-action social media as we can get right now. In 140 characters, we deliver a message to the world. It’s short, sweet, and constantly flowing. It allows businesses to interact directly with people in its market and vice versa. Your presence on Twitter means that you really exist in this moment and you’re ready to do business.
    3. LinkedIn is less common-people oriented, and more professional-oriented. This is the kind of social networking you want to do in order to maintain business relationships and find new business connections. People don’t necessarily always remember your business, but they will remember you.
  3. Create a professional quality brand identity:
    It is important to always be checking up on how your brand is being perceived. Is it being perceived positively? Is it being perceived the way you want it to be perceived? Is it even on anyone’s radar? To get your brand bumping around people’s heads, you need a logo. A visual to represent your business is important because it’s an immediate and easy association to your business. Ask yourself what you want people to remember about your business and how you can represent that in a logo. Another classic way to get your brand out there is by printing business cards. You will want a design that’s easy to read and includes your logo, name, business, phone number(s), website address, email address, and physical address (if applicable). Don’t leave off your email! The less information you provide, the harder it will be to contact you and the less people will be motivated to use your business.

Marketing is all about building a presence, relationships, and drumming up business. The only way your business will grow is if you make an effort to reach out!