How to measure returns on your digital marketing investment (ROI).

Your website is the cornerstone of your digital marketing strategy – and with the right SEO strategy, an attractive destination that’s easily found.

Any investment in digital marketing is only as good as your marketing strategy so you will need to invest some time (and perhaps some money) in order to get the best possible return on investment (known as ROI).

But what is ROI and why does it matter? We’ll explore it in depth here, so you can measure your ROI and use it to drive your marketing strategy forward.

What is ROI in digital marketing? And how do you measure it?

When you boil it down, ROI refers to the amount of profit you make in relation to the amount of money you invest on any given marketing tactic (such as SEM, SEO or content marketing).

There’s a simple formula you can use as a ROI calculator:

ROI = Amount Made on Investment / Amount Spent on Investment x 100

This will leave you with a percentage that shows how much ROI you pulled in. For example, let’s say you spend $5,000 on a content marketing campaign. That campaign brought you a net total of $15,000 in profit. The equation would be:

$15,000 / $5,000 x 100 = 300%

In this case, your ROI was 300%—which would be considered a very good return on investment. But if you only made $7,000 in profit, your ROI would be 140%—which is at the low end of a typical ROI in digital marketing.

Hone your strategy by ensuring your marketing goals are SMART – specific, measurable, achievable, relevant, and time-bound.

You can enter and track these goals in Google Analytics – the home of a lot of (free) insight into the performance of your website, including page views, duration of visits, return rate and bounce rate (how many visitors navigate away from your site after viewing only one page).

Google Analytics is also the place to work on your SEO – e.g. add target keywords and links to your website so you appear on the first page of Google.

Digital marketing ROI metrics.

What metrics you look at to determine your ROI will vary depending on the strategy you’re using. When you’re employing SEO or SEM (paid SEO), expect to see your investment return as:

  • More traffic to your website
  • Better rankings on search engines like Google
  • More customer conversions or purchases over time.

RELATED: 4 basic SEO tips to help boost your Google rank.

When it comes to content marketing, ROI metrics can include:

  • Organic traffic to your site via the content you are posting
  • Improved conversions on primary landing pages
  • Increased engagement on social media
  • More subscriptions/opens of your EDMs.

It’s not always easy to tie these metrics to a specific number. This is where Google Analytics can come in handy.

Within Google analytics, you can set up what are known as ‘goals’. You can tie these goals to specific revenue increases.

For example, you may determine that getting 100 new visitors to your website each month results in a profit of $500, based on the average amount of purchases per 100 visitors. Therefore, you could set up a goal in Google Analytics to measure every 100 new visitors and assign a $500 profit to that goal. Then, you’ll automatically be able to track how much ROI you’re bringing in as part of your marketing efforts.

The right digital marketing strategy delivers valuable data that you can work with and respond to in real-time. Done well, it’s a great way to establish your business online with a rich ROI.

Need an expert’s help with SEO or generating leads? Yellow offers a number of services that can help you pull in more leads and convert them into paying customers. Get in touch today.

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