The critical responsibility of a brand or a business is to measure digital marketing ROI to identify the status of campaign performance. And for that, every brand and manager must know the digital marketing measurement tools to judge what to track and ignore.
So read on to get your marketing strategies polished with tools to measure digital marketing ROI and boost your digital marketing performance.
Return on Investment (ROI) measures your online marketing campaign’s profits or losses and helps you determine the effectiveness of your strategies. Also, it is used to check an investment’s productivity or to compare several investments.
You can take the help of this formula to calculate ROI;
ROI= (net profit/total digital marketing costs) x 100
Why is it necessary to calculate ROI?
Tracking the ROI assists in the success of any marketing initiative. It lets you determine what’s working and what you can change to boost results.
Without ROI measurement, you’re blind and disorganized toward marketing funds.
If you cannot track it by yourself, you can approach a digital marketing company like Techmagnate or others.
Finally, ROI not only means optimizing the current budget but also provides opportunities to make quick decisions on where to allocate your future budget.
How to measure ROI to know the performance of a marketing campaign?
Getting an accurate report of the ROI metrics is a significant hurdle for firms specializing in services, B2B, and other industries where products don’t get sold online.
However, it’s still essential to understand how to measure marketing ROI since you get a better perception of whether or not your digital marketing investments result in profitability.
- Conversions
If your marketing campaigns aim to convert, then conversion metrics will tell your status in accomplishing this goal.
Also, it shows what your prosperous areas are to allocate funds for better results and improved ROI.
So, ensure to track these numbers monthly for an idea of the inquiries your sales team fields.
- Cost per lead (CPL)
If your digital marketing campaign aims to collect new leads for your sales team to close. Then you need to measure the pay for each new lead to determine your ROI for that particular campaign.
And to calculate CPL, divide the total ad or campaign expenses by the total number of leads ascribed to that campaign.
- Lead close rate
This gives you a broader idea of how effective and profitable your digital marketing campaigns are, thereby contributing to your ROI. You can calculate it by dividing the number of successful sales by the number of leads and multiplying the outcome by 100.
It tells you the percentage of the leads they get that convert into sales.
- Cost per acquisition
It tells you the average cost to acquire a new customer. You can calculate it by dividing total marketing costs by the sales generated.
If you find the cost higher to get a new customer, you need to revolutionize your marketing strategy and campaigns.
Also, you can approach a digital marketing companyto help you to make it more effective.
- Lifetime value
It aids in understanding your digital marketing ROI by mapping what the average consumer will spend over their lifetime. And it gives you overall customer value.
First, you need to know your average purchase value and then multiply that by the average frequency rate to identify customer value. Then multiply it by the average customer lifespan.
- Average order value
This tracks the average dollar amount spent upon a customer placing an order. To calculate it, divide the total revenue by the number of orders.
Interestingly, increasing an order’s average value by small percentages can result in new revenue by thousands.
Revolutionized Digital marketing measurement tools to track digital ROI
Measuring tools are vital elements to help evaluate the result of a brand campaign. Here are some time-tested tools to boost your digital marketing campaign and ROI;
- Google Analytics
- Google Ads
- Sproutsocial
- Yoast SEO
- Hootsuite
- SEMRUSH
Conclusion
A company must use a digital marketing budget productively in digital marketing campaigns. And the only way to improve is to use potent digital marketing measurement tools to gain maximum ROI performance.