How to Measure Digital Marketing ROI
Understanding Profit From Digital Marketing
October 29, 2024 in Digital Marketing
The basics for assessing ROI from Web Design, SEO (Organic Search), and PPC (Google and Meta Ads)
What Gets Measured, Gets Improved
With any skill, if you want to improve, you have to know where you are to get to where you want to go.
The same applies to digital marketing. Tracking data and the returns of campaigns is critical to improve campaigns.
Start With The End In Mind
When Bullzeri works on a campaign, we know we need to justify where your hard-earned dollars are going – we manage our client’s investment in marketing with care, diligence, and respect for the growth you are investing in. We track the data to understand the returns.
2. ROI in Digital Marketing
Understanding the ROI (Return on Investment) is crucial in evaluating effectiveness. Here’s the basic formula:
This metric helps businesses determine the value each service brings to the table.
3. Setting Clear Objectives and KPIs for Each Service
For accurate ROI measurement, each service needs specific objectives and KPIs:
- Web Design KPIs: Conversion rate, user engagement metrics, bounce rate, and time on page. These KPIs focus on how well the website encourages users to take action.
- SEO KPIs: Organic traffic, keyword rankings, click-through rate (CTR), and domain authority, which help assess visibility and traffic quality from organic search.
- PPC KPIs: Click-through rate, conversion rate, cost per click (CPC), and cost per acquisition (CPA), focusing on the campaign’s effectiveness in attracting and converting leads.
4. Attribution Models for Accurate ROI Measurement
Understanding which attribution model works best for each service helps track ROI more accurately.
Core Attribution Models:
- First-touch: Gives credit to the first interaction a user had with your brand.
- Last-touch: Credits the last touchpoint before conversion.
- Linear: Distributes credit equally across all touchpoints.
- Data-driven: Uses a weighting to allocate credit
Choosing the Right Model for each service aligns the ROI data with the specific goals of that service.
5. Measuring Tools by Service
Understanding which attribution model works best for each service helps track ROI more accurately.
- Web Design Tools: Google Analytics provides comprehensive data on how your website is performing.
- SEO Tools: Google Search Console monitors site performance in search results, while tools like Keyword.com, Ahrefs, and SEMrush track keyword rankings and backlink data.
- PPC Tools: Google Ads and Meta Ads Manager allow detailed tracking of ad performance, while cross-platform tools like Google Analytics integrate data across multiple channels.
6. Calculating ROI for Each Service
Understanding which attribution model works best for each service helps track ROI more accurately.
Web Design:
- Measure improvements by tracking lead and sales data, conversion rate increases, time on page, and engagement post-redesign. Example: A website redesign that improves conversion rates by 20% can lead to a significant increase in leads.
SEO:
- Track ROI by monitoring organic traffic growth, the number and quality of leads generated, and cost savings compared to PPC. Example: Calculate ROI based on increased organic traffic from targeted keywords and the revenue generated from these visits.
PPC:
- Measure the direct cost of ads versus immediate and lifetime revenue generated using metrics like CPA (Cost per Acquisition) and ROAS (Return on Ad Spend). Example: If a campaign has a CPA of $50, and each conversion generates $150, the ROI can be calculated by comparing ad spend to revenue.
7. Evaluating Long-Term ROI for Each Service
- Web Design: Long-term ROI ties to customer lifetime value (CLTV) as improved user experience often leads to higher customer retention and loyalty.
- SEO: Organic growth through SEO has a compounding effect, as ranking improvements and quality backlinks lead to sustained visibility.
- PPC: PPC requires ongoing evaluation, especially with retargeting and segmentation that allows for more efficient ad spend and improved campaign performance over time.
8. Improving ROI in Each Service Area
- Web Design: Enhance the site experience with additional and informative content, especially blog posts.
- SEO: Content creation and optimization, focus on high-value keywords and employing backlink strategies will enhance organic visibility.
- PPC: A/B testing for ad copy, adjusting the bids, targeting, and refining audience segmentation to maximize ad efficiency and return.
We do all of these activities when we run these campaigns, to continually improve the results and generate higher profit.
9. Common ROI Pitfalls for Each Service (and How to Avoid Them)
- Web Design: Avoid focusing purely on aesthetics without considering conversion data - Amazon is not the most beautiful website but it’s effective.
- SEO: Focus on conversions and ranking improvements for high-impact keywords. Impression metrics don’t provide a ton of data or improvement to profit.
- PPC: High CPC without conversions leads to wasted ad spend. Improper negative keyword strategies waste a lot of money. Tracking must be correctly configured.
Start With The End In Mind
- Web Design: Measuring ROI in web design can be challenging since the benefits are often indirect, such as improved user experience and brand perception.
- SEO: SEO takes time to show results, making it difficult to assess immediate ROI. It may take 6 months or longer to see the returns from these efforts, but it is typically the lowest cost and most affordable form of marketing.
- PPC: Attribution can fail to account for conversions through other channels that were the result of a paid search campaign.
Improve Your ROI and Increase Your Pofits
Are you getting transparent data from your current marketing agency? Is there a way to improve your return and increase your profit?
Schedule a free ROI Strategy Call.
We will understand any current or past marketing activities, what worked and what didn’t and why, and recommend strategies to grow your profit.
