How to measure Digital marketing ROI ?


To measure return on investment (ROI) is essential for every marketing activity and is also a need for Digital Marketing. Measuring ROI will help you to find the effectiveness of your Digital Marketing strategy and will let you to get the most out of your marketing spend through post analysis of ROI.

In the article we will discuss in depth on how to measure digital marketing ROI.

What is Digital marketing ROI?

Digital marketing ROI is the return on investment you made for your digital marketing campaign and efforts.

In other words, the calculating ROI will tell you whether your investment made is worth your marketing campaign. If the return is positive on investment, that would ensure that your campaign is bringing in the more return than you are spending on them.

Demonstrating ROI of Digital Marketing is vital because without doing that you are essentially market blind. It is therefore important to track the success of your campaign over time and to know what’s working and what’s not.

(Source : profitworks )

With calculating digital marketing ROI you always have an opportunity for improvement. Once you identify the areas which are not performing as you expected, you can analyse these aspects of your campaign and take reasonable action to improve.

Knowing the ROI of all aspects of your digital marketing campaign will help you get a better understanding of where you should be allocating your Digital Marketing budgets.

How to measure Digital marketing ROI

Identifying your Digital marketing ROI can be tough at times as not all of your digital marketing campaigns will be having an end goal of conversion.

Building brand awareness is one such digital marketing campaign meant to build awareness of your brand.

Over all it will ultimately depend on what your unique goals are for your digital marketing campaign. With so much data available through google analytics sky’s the limit to do analysis for a successful campaign.

Also Read : 10 Online Marketing Mistakes that people make everyday

We have gathered most common digital marketing metrics that you will need to measure ROI

  • Cost per Lead

If your website is collecting leads for your sales team to “close,” you need to know how much you are paying for each lead.

If the cost of each lead is less than what you produce by closing leads, that will be a good indication of upward return on investment.

  • Lead Close Rate

To track lead close you need to make sure you keep an eye on your lead close rate so you can check that against the leads being generated. This will ensure your digital marketing efforts are delivering leads profitably.

  • Cost per acquisition

The cost per acquisition can be figured simply by dividing your marketing costs by the number of sales generated.

You will get to know what it costs to get a sale, which will further help you to get a grasp on your ROI.

  • Conversion Rates by channel

It is important to where our traffic is coming from, whether it is organic traffic, paid traffic or inbound social media traffic. This information will tell us where the bulk of our customers are and where the efforts are producing results.


(Source : wordstream )

Conversion rates can be a good indicator of marketing campaign success which also let you know where the best opportunities lie.

  • Landing page performance

Landing page plays an important role to ensure your conversion is good, to do so it is necessary to measure performance of landing pages. Bounce rates, conversion rates, CTR etc. can be used to measure your performance.

Find a landing page that isn’t driving conversions and fix it or could divert traffic to another page. Either way, you will want to know how each page is performing.

  • Customer lifetime value

To have an idea on what an average customer will spend over their lifetime, can help you understand the ROI of your marketing strategy.

Let’s say that it takes you 5000rs to bring in a new lead, but in return could only make 5000rs out of purchase that would be a net loss once you consider the cost of efforts and everything else beyond marketing investment.

But if you knew beforehand that the customer is only going to spend 5000rs every six month for the next few years, the average lifetime value estimate increases.

Not to say this you have bear loss on every first customer but if the initial investment brings in long term profit.

Also Read : What should be my budget to start digital marketing?

When you look at it from the perspective of long term profit, it gives you confidence to stand to gain customers.

Improve your Digital Marketing ROI

After you have started to measure your digital marketing ROI, you can begin to look for areas of improvement. Follow these tips to measure ROI for your digital marketing campaign.

  • Identify your Goals

Before you begin to measure digital marketing ROI, first you need to do is to identify your campaign goals. If your goals are not known, then you might not be using the metrics to track your ROI.

Start by assuring and improving your digital marketing return on investment by identifying clear goals, which will allow you to achieve your desired results.

Totally avoid undefined goals, instead make sure goals are smart and specific, achievable, measurable and time bound.

Use your Key performance indicator ( KPIs )

After identifying your goals and objectives, you need to make sure that you’re choosing KPIs to align them with these goals. Key performance indicator is an important metric and a way to measure your progress towards achieving these goals. KPIs differ based on their objectives like KPIs for SEO will be different from KPIs of social media or email. 

You have to make sure to relate your KPIs with your goals you want to achieve. If your goal is to increase conversions, then you might have to use metrics that deal with sales to measure progress on achieving the goals.

KPI not only sets clear expectations for your marketing team but also will help you track your progress towards achieving your business goals.

Also Read : How do you create a Digital Marketing plan?

Test different strategies

Testing is another important part of improving your digital marketing returns on investment. From helping you to discover new insights for your digital marketing strategy to improving the performance of individual marketing campaigns it helps in all aspects of digital marketing.

By testing only you can know which marketing campaigns are giving out the expected results for success. Run A/B tests on your different digital marketing campaigns to see which elements are proving to be better out of others. Every form of marketing whether email marketing or social media marketing can benefit from testing.

Once you have an idea of which element of your campaign performs best, make strategic changes after analysis to both the current and future marketing campaign. Adapt the changes and apply across channels.

The Takeaway

To improve your ROI of Digital Marketing campaigns you need to understand with your current campaign performance. Measuring Digital marketing ROI is one of the most accurate ways to measure your marketing campaign success. This will help you to use the strategy to your overall business activities to perform better on all channels. But before you start measuring ROI of digital marketing, don’t forget to identify your business goals.

Also Read : How do I get started with digital marketing?

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