Key Principles of Digital Marketing ROI for Smart Marketers
Over the years Digital marketing ROI has become one of the most effective methods of brand promotion and consequently lead generation.
The only element that marketers have been having difficulty grasping is how to successfully calculate return-on-investment (ROI). The success of your content and the measuring of your RIO are interdependent.
ROI will mainly focus on the time and money spent in creating and promoting content while the success of the content will depend on the on the goals that were set for your content, page views, marketing qualified leads, social shares or even all the above.
You will not be able to calculate the ROI of your content without first getting a clear understanding what passes for successful content for your business. This article will try to help you in effectively measuring your content marketing efforts.
Common Digital Marketing ROI Issues
There are two main issues that marketers are faced with when calculating their digital marketing ROI. The first issue is that when it comes to content marketing it is a long-term game and you may find that your campaign starts on a negative ROI, which is common for most businesses.
The ROI will improve over time. The second problem experienced by marketers when dealing with ROI is that there are so many benefits offers that these marketers offer, that are really hard to quantify numerically, for example brand perception.
The following are steps you can follow to assist you in calculating you content marketing RIO and the formula to use.
Understanding the Basic ROI Calculation
It is important to understand what ROI really is before you can start determining what factors influence your content marketing ROI. The basic form of ROI is as follows:
The last representation of the ROI is the easiest one to understand even if you are a beginner in content marketing ROI calculation.
There are so many elements that go into the investment and return of a content marketing campaign with some of these elements being quantifiable while others are not. The following is a breakdown of how a digital marketing ROI generally looks like.
Elements of Digital Marketing ROI
There are 3 main elements of a digital marketing ROI which are:
• Investment by the business
• Utilization of the content
If you create content and the content does not get used then all the money that you spent in creating the content and promoting it will be counted as negative ROI.
Ensure that you mostly focus on sharing and using your content and not just the creation of the content.
• Performance of the content created
You need to clearly define the business value of the outcome of your content marketing ROI. Ensure that every piece of content has its own goal that it needs to achieve in addition to the general ROI calculations that will be applied to it.
The following are the steps you should follow when it comes to ROI calculations
1. Measure Your Investment
You will always need to input some work before you can get to see the benefits. You should take stock of all the money that you are spending to ensure that your campaign is a success.
In the event that you are working with one external agency then the cost you will be undertaking will be straightforward for all the elements of your campaign including SEO, writing, social ads and so much more.
If you are working with your full-time employees or enlisting the help of multiple contractors then calculating your cost may be a bit difficult.
In this case, you will have to create an estimated average of how much time these individuals spend in a month and how it matches with their salaries.
2. Calculate Your Return
The reputation that content marketing has created for itself is that it does a lot with very little. This will present itself when you calculate your ROI return.
The following is a breakdown of the metrics with an additional metric, which is also very important, which is retention.
These focus on the number of people who are seeing our content either on your website or other channels. These metrics may include:
• The number of page views
• The time spent by the user on your page
• The number of downloads on your page
• The number of unique visitors
• The ranking of your keywords or other SEO rankings
• The number of CTR on your social media content or email campaigns
• The opening rate of your email campaigns
You should ensure that you pay extra attention to tracking your email campaigns because they are the highest producers of ROI tactics.
This is determined by your ability to keep your customers engaged. Some of the metrics include:
• The percentage of visitors that return to your website
• The bounce rate
• The number of blog subscribers that you get
• The number of followers you get on social media
• Sometimes even open rates and click-through rates may be considered especially when engaging your customers through tactics such as newsletters.
Most of the metrics will be gotten from your social media analytics tools. They include:
• The number of content shares
• Number of re-tweets
• The number of likes
This is one of the easiest elements to track using a content automation platform. It has been recorded that companies that use automation have been able to increase their conversion rates by responding to qualified leads.
When dealing with leads always consider those leads that have been generated throughout the buyer’s journey.
Most of the time it will always come down to how much money the content you created is making for the business. Sales metrics include the following:
• Total percentage of sales opportunities influenced
• The value of opportunities influenced
• The percentage of the won sales opportunities
• The value of the won sales opportunities
3. Determine Your Digital Marketing ROI
The revenue generated by a business is what really matters at the end of the day. You can use the following formula for one piece of content, for your overall content marketing activities or for a specific campaign.
It’s important to make sure that you understand everything that goes into the calculation of your content marketing ROI even if you won’t use every metric.
As a marketer your main care is revenue and thus you should explore some of the above metrics to determine your ROI even if you will only present this to your fellow marketers.
Don’t forget to also consider all the other difficult to quantify benefits of your content marketing campaigns in your final presentation of your ROI.
The key to good returns through content marketing is to ensure that your content is ever fresh, it is relevant and timely and that it resonates with your target audience and or customers.