How to Measure Your Online Marketing Return
Being able to measure your return on investment from online marketing activities is critical for any business in order not to waste time and money.
We’ve focused on 4 of the key areas of online marketing below and explained how you can measure your ROI for each;
- Search Engine Optimisation
The first step to measuring ROI is to have a clear plan of what you’re trying to achieve. In terms of SEO this could be getting your site ranked on page 1 of Google for your chosen keywords and phrases.
You’ll need to work out exactly what the increase in traffic will mean for your website, for example if your site has a very poor conversion rate, is the extra traffic actually going to benefit you in terms of extra sales and bring a positive return on your SEO spend?
- Pay per Click Advertising
Pay per Click advertising through Google Adwords allows you to monitor your return on investment easily.
There are statistics available for each keyword that show exactly how much you’ve spent and how many conversions you’ve had (you need to set up conversion tracking on your website to enable this).
By being able to see your cost per conversion you can quickly work out if it’s worthwhile or not for your business. For example, if you sell a product for £100 online which normally generates £50 profit, your cost per conversion would need to be below £50 to give you a positive ROI from Pay per Click advertising.
- Email Marketing
If you’re carrying out email marketing it’s important to choose a platform with good analytics to send your emails from.
Calculating you ROI will again depend on what you want to achieve but let’s say that you have online clothes shops and are running a January sale.
You’ll need to factor in the cost of having the email designed, the copy written (if you’ve written this yourself you should assign a value to your own time) as well as the cost of sending all the emails out. You can then compare all your costs to the revenue generated by your email by having a unique discount code for people to use on your site.
- Social Media
There’s been much debate about whether or not you can effectively calculate your social media ROI or not.
You may set a number of different parameters such as gaining 100 relevant followers on Twitter or increasing newsletter subscribers through Facebook.
The important thing is to accurately measure the amount of time these activities are taking and assigning a monetary value for either your own or an employee’s time to actually do the work.
If you expect an instant increase in sales through social media, you’re likely to be disappointed as it takes time and effort to build up your community and for people to become aware of your brand.
Continuous evaluation of your social media efforts can help you to quickly pinpoint what’s working and what’s not based on your overall objectives, which in turn can help you achieve a good ROI.
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