How to Measure Digital-Marketing ROI for 2014 and Beyond

Many clients ask us for advice about how much of their digital-marketing budgets they should invest in each of the various media channels, including email marketing, pay per click (PPC) advertising, search engine optimization (SEO), website improvements, social media, and radio and television. In other words, they want to know which channels provide the best return on investment (ROI). Here we share a few pointers on how to measure ROI for each of the primary digital-marketing channels.

If you find it challenging to determine your digital-marketing ROI, you’re not alone. According to a 2013 online study of 1,000 U.S. digital marketers by Adobe Systems and ResearchNow, 76% of survey respondents believed measuring marketing performance was important, yet only 29% felt that they were doing it well. While reaching their customers was the number-one concern for these marketers, their next three top concerns all had to do with measuring campaign effectiveness and demonstrating ROI.

Increasing ROI Is a Top Priority for Marketers in 2014

What are the top three marketing success metrics for 2014? More than 2,200 global marketers from various industries responded to that question for the Salesforce ExactTarget Marketing Cloud 2014 State of Marketing study and these are the leading responses:

  • 67% said conversion rate, defined as sales directly attributed to digital-marketing campaigns
  • 64% said engagement rate, as measured by opens and clicks
  • 61% said ROI.

How do marketers intend to reach their 2014 performance and ROI goals? Email marketing is a primary way. In the 2014 State of Marketing study:

  • 88% of marketers believed that email marketing does or will produce ROI
  • 68% reported that email marketing is core to their business
  • 58% planned to increase their email spend in 2014.

And although marketers are devoting more time and resources to social media, only 34% in this study said they were currently seeing ROI from social-marketing efforts.

Measuring Digital-Marketing ROI

As you set out to plan your marketing strategy and budget for 2014, an important first step is to calculate the ROI for each of the marketing channels you currently use. Here are some quick tips for measuring ROI of the following key digital-marketing channels:

  • Email marketing – This is the area we at FulcrumTech spend much of our waking moments working on. And you’ll quickly realize how unbelievably measurable email marketing is in terms of ROI. You can measure the value of your list-building efforts and, ultimately, the value of the conversions you drive from your emails – from opens to clicks to landing-page conversions.If you really want to measure and play “what if” scenarios with your email-marketing ROI, check out FulcrumTech’s ROI Goalsetter™ tool for free at Want to know the impact the combination of improvements in your list growth, open rates, click-through rates, and landing-page conversion rates? This financial-modeling/ROI calculator will help you evaluate all of that.
  • PPC advertising – PPC is so incredibly grounded in data that you can measure just about every aspect of it to determine exactly what you’re getting as a return. Some important ways to measure ROI for your PPC marketing efforts include:
    • Using dedicated landing pages for your ads.
    • Using call tracking on those PPC ad pages and making sure your analytics are solid. As a result, you’ll know exactly what you’re paying for the traffic, how much is converting, and what level of revenue is coming in.
    • Calculate your cost of acquiring your leads, as well as the ROI from each of those leads.
  • SEO – Calculating the ROI for your organization’s SEO compared to email marketing or PPC may not be easy, but you can begin by measuring historic website traffic, historic conversion, and historic revenue levels as a baseline. You also should determine the most critical key performance indicators (KPIs) for your organization’s digital-marketing efforts. For example, these could include sales, revenue, and/or newsletter signups.
    With your web analytics tool (e.g., Google Analytics), you can easily set up goals to track exactly how many people are coming in from organic SEO and ultimately converting. As you see your organic website traffic increase, measure how much is converting against your KPI goals. In addition, be sure to determine the cost of acquisition. To do that, look at what you’re spending for SEO services versus the amount of conversion value you get from your increased organic traffic.
  • Social-media marketing – Measuring the ROI for social-media marketing can be a lot more challenging since its results involve such intangibles as engagement, audience reach, and “buzz.” There are ways to track social-media success, however, including such measures as the number of fans, followers, page likes, retweets, repins, web mentions, and sales levels. The following are also some free tools that are available to help measure your social-media ROI:
  • Website improvements – This involves optimizing a website by determining which combinations of design and content drive the most conversions. Typically, improvements to a website are highly measureable investments. Some important measurements to help you evaluate ROI for website improvements include:
    • Number of website visitors
    • Click-through rates from dedicated landing pages
    • Conversion rates, such as online shopping cart sales, newsletter signups, completed surveys, white paper downloads, etc.
    • Increase in website-generated revenue.
  • Radio and television – If you think these can’t be measured, think again. With today’s call-tracking technologies coupled with unique URLs, redirects, and web analytics, you have many of the tools to evaluate the value from these channels, as well.

When it comes to allocating marketing dollars to various digital-marketing channels, there’s no one-size-fits-all answer. Each organization needs to take a good look at when and how prospects and customers engage with your brand as you evaluate each of your digital-marketing channel options. Once you’ve calculated the ROI for each of your digital-marketing channels, compare and make budget allocation decisions accordingly. Then, develop a sound strategy to manage and optimize each of those primary areas of engagement.

Are you feeling overwhelmed in deciding which digital-marketing channels you should focus on, measuring digital-marketing ROI, and determining how much of your budget you should allocate to each channel? FulcrumTech can help. Email us or give us a call today at 215-489-9336 and we’ll get you started on the right path to meet your marketing goals in 2014.

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