Most of my audience knows me as a journalist, but my alter ego is a digital marketer. Recently, someone I work with told me that you can’t measure the return on investment in marketing. I called BS.
Marketing is a long game with many touches. While you may not be able to assign a specific dollar amount, you can certainly identify the key performance indicators that gauge the success of your campaign. Email open rates. Ad conversion rates. SEO metrics like traffic and position on the search engine response page. Each of these indicators can help you determine your overall digital marketing ROI.
But your marketing budget and your revenue should have a correlation, and if you don’t see results after working with a marketer for some time, it’s likely that you should reevaluate your strategy and look closely at what’s working and what isn’t. Are you spending enough? Are you spending too much? What are your rates for the KPIs listed above?
A meaningful marketing campaign should deliver something in return. You can certainly look at social media analytics and web traffic results, but what should you actually expect from your marketing efforts?
Let’s talk about what you should expect to get when you hire a marketing agency and how to determine if what they’re doing is working.
Growth Marketing ROI Applies the Scientific Method to Campaign Results
Growth marketing is a form of marketing that uses the data from experimentation to understand the full customer journey instead of just the top of the funnel.
“One of the characteristics of growth marketing is that we’re very experiment focused,” says Mariana Gonzalez, the head of growth marketing at Customer.io. “We love running experiments to help measure impact and so have done that kind of impact to ROI measurement, both on the acquisition side and on the engagement side.”
According to Gonzalez, the acquisition and engagement sides of marketing are easier to measure ROI on than the harder-to-quantify marketing strategies like brand marketing.
“It’s definitely measurable,” says Gonzalez. “It can start from just the most basic level. For example, you can measure your customer acquisition cost. So you measure how much you spent on a campaign and how many people clicked through and signed up and how many converted.”
ROI of Brand Marketing
Brand marketing can be harder to measure, but it’s not impossible. As a content marketer and a storyteller, this is one of my favorite types of marketing. Creating human-centric campaigns has become important, especially as consumers increasingly prefer authentic marketing strategies.
Although it can be harder to determine the effectiveness of brand marketing, there are definitely ways to quantify certain aspects of it.
“If you are spending a certain amount on Google and Meta, you can run brand lift studies that help measure the impact of media on awareness and sentiment,” says Gonzalez. “They run your ads and then run surveys to understand the lift.”
Basically, brand lift takes a sample of your target audience and surveys them about your brand. The sample is split into people who have seen your current campaign and people who haven’t. Google or Meta then measure the differences in responses between people who have seen your campaigns and people who have not, helping you assess the impact of your paid content.
ROI of Search Engine Optimization
Here’s the thing about search engine optimization: It’s incredibly hard to explain, impossible to do unless you have done it, and it’s often difficult for clients to see the impact in it. They get the gist of it: Increasing your ranking on search engines brings more traffic to your website, which means more eyes on your product, which will hopefully lead to more conversions.
But good SEO is notoriously time consuming, expensive and it can take three to six months (or even up to a year in more extreme cases) to see measurable results. Billy Wright is the lead SEO strategist at Direct Online Marketing and has been doing SEO for 15 years.
“When calculating the ROI of SEO, you need to take into account the tangible: Your current traffic, your current leads and your current conversion rates depending on your business,” says Wright. “And [you also have to consider] the intangible. SEO doesn’t just stop as soon as you stop paying for it, and it can deliver a return on investment for potentially months or years to come.”
SEO has gotten a bad reputation because of unscrupulous practices in the industry. You may have heard the terms “white hat” or “black hat” (which are terms taken from the cybersecurity world and applied to SEO). When an SEO uses black hat practices that are designed with the intention of fooling search engine spiders instead of providing content that is helpful to humans, it can actually hurt your business.
“Be VERY wary of any agencies that try to promise immediate success,” says Wright. “They are either scamming people or using tactics that are less than savory and could result in your website being blacklisted from the Google search results.”
When you hire an SEO practitioner that is ethical and skilled, they should set realistic expectations that take the whole picture into account. It’s great to end up on the first page of Google, it’s better to end up on the first page of results that your target audience is actually looking for.
“While an SEO agency should never give you a direct, expected result from their SEO efforts in a pitch, a very talented agency will be able to determine the percentage growth you’re likely to expect based on their ability to help you rank higher for keywords that can drive traffic and potentially conversion,” says Wright. “Good SEO shouldn’t only drive up traffic, but it should be targeted enough to increase rankings for terms that will actually drive more of your target customers to your site.”
The Takeaway on Digital Marketing ROI
The key to understanding your digital marketing ROI is to take into account the goals that you’ve set, the cost of the campaigns and the results of these campaigns. Marketing should be targeted to the people that you want to see it and should deliver a predefined impact.
Your marketers should also be tracking the effectiveness of campaigns by using website tracking tools, user data and KPIs like clickthrough rates and conversions. When I work with my clients, I use the data from the platforms we use to deliver a measurable explanation of the success of campaigns. I also ask questions about information that I may not see.
For example, one question that I ask my clients about their Google ads campaign is, “Are the leads generated from the form on your landing page representative of the type of client you would like to target?” I can see numerical data about how many people filled out the form, but if it’s not generating useful responses, it’s time to regroup and revise our strategy.
Although you may not see a dollar amount right away from all forms of marketing, your company’s marketing should eventually bring results in the form of conversions and customer loyalty.
No matter what marketing strategies you decide to implement, you should always have a good idea what your return on investment is and how long it should take to see results.
Photo courtesy sasirin pamai/Shutterstock.com
