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How to calculate the ROI of my Digital Marketing campaigns?

Published on 08 January 18

Digital Marketing is one of the most valuable strategies for any business that wants to expand its visibility online and, consequently, see its billings increase exponentially. But how to know, exactly, what is the return of an action online? The answer is quite objective: just learn how to calculate the ROI of your Digital Marketing campaigns.

ROI of Digital Marketing Campaigns? You must be moving now in your chair intrigued by this acronym, right? But, very calm at this time! Let's explain everything you need to know about the issue without too many detours.

Stay a little longer with us and we guarantee that by the end of this reading you will understand everything you need to know about ROI. Come on?

To begin with, what does ROI really mean?

Usually, it always hangs in the air of the marketing department sure to charge against the results of the digital campaigns. But thanks to the various metrics provided by Digital Marketing, it is possible to deliver reports with very consistent data on the results of a campaign.

Among these metrics, we can highlight the ROI calculation - or, in other words: Return On Investment . A fairly simple calculation to make, but of enormous importance for your company to know exactly what was the cost-benefit (profit or loss) in a campaign during a predetermined period.

With the calculation of ROI, you know beforehand if an online campaign is working and, especially, what was the real return on investment made.

Why knowing the value of ROI is critical to a business?

The answer may seem obvious, but it does not hurt to reinforce it: you need to calculate the ROI of the Digital Marketing campaigns to know if the money spent is paying off or not. Basic answer, but important, is not it? We're talking about your money, after all.

When you know your marketing ROI thoroughly, you can make the necessary adjustments to leverage your campaigns and focus your efforts on the most profitable strategies over the next few months.

Of course, your business needs to know first what your goals and goals are and what you want to achieve in an online campaign, so it's easier to understand if your ROI is meeting the goals and goals you've previously set.

How to calculate the ROI of Digital Marketing campaigns?

Often, most companies are completely unaware of the true reality of their online campaign numbers, and because they can not see the results in a concrete way, they mistakenly think that Digital Marketing is a cost of no return.

But this problem can be solved quickly by simply periodically monitoring your ROI. Here's how to do it:

Calculation of ROI = [Revenue (Return) - Cost / Cost]

It is worth remembering that revenue equals everything the company can raise in sales. Already the costs relate to all expenses incurred to make the campaign viable, such as hiring employees, paid ads or any extra expenses.

Let's look at a practical example:

Let's say you are managing director of a travel agency company based in UK and you have invested $ 1,000 (cost) in a campaign in AdWords , for example. In the meantime, you can make 10 sales of the same service in the amount of $ 500.00 each, raising a total of $ 5,000.00 (revenue). How does the ROI calculation work out in this case?

ROI = [R $ 5,000.00 - R $ 1,000.00 / R $ 1,000.00]

ROI = 4

ROI = 4 x 100% = 400%

In terms of percentage, this ROI equals 400% return on the amount spent. Not bad, is it?

It is worth mentioning, however, that in this model, the goal was to learn how to calculate the ROI of a campaign that focused on increasing service sales , but if the goal was to generate more leads, for example, the formula would not change, however, the calculation of the investment would be different as it would be necessary to multiply not the number of sales per average revenue but the number of leads per average revenue.
This blog is listed under Digital Media & Games and E-Commerce Community

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