The role of a digital marketer in today’s world is a role that requires a lot of attention to detail. The advertising space that is available out there is limited to begin with, and it is particularly crowded in the online world. Therefore, those who are tasked with taking on digital marketing responsibilities must consider the ways in which they can create digital ads that truly bring the about a high return on investment (ROI). To figure out what those ads look like, it is necessary to know how to measure ROI in digital marketing to begin with.
Just remember, it will take some time before you are able to realize the kind of ROI that your specific marketing efforts are generating. Give yourself the time necessary to form an accurate picture of the ROI that you can expect from any given marketing effort.
What is a Return on Digital Marketing Investment?
The first thing to look at is exactly what a return on your digital marketing investment looks like to begin with. The Adobe Experience Cloud Blog explains the idea well:
A positive ROI means that you’re making more than you invest — the customers you attract as a result of a campaign more than offset the cost of that campaign. A negative ROI is the opposite, and it happens when you spend more money on your marketing than you earn from it.
Essentially, all marketers are going to look for positive ROI digital advertising opportunities so that they can discover the places where they should invest the largest portions of their advertising budget. Once they know where the highest ROI opportunities are, they can start to throw money at those opportunities.
What is the Value of Measuring ROI on Digital Advertisements?
There is an immense amount of value in measuring the ROI of digital advertisements. It is the only way that you know for certain how well your digital marketing efforts are going. It can also be an early warning sign that you should change some things up with your approach. The sooner that you know which efforts are going well and which are not, the sooner that you can allocate funds where they ought to go.
The Calculations You Need to Know for Determining Your ROI on Digital Advertisements
Certain mathematical calculations are necessary to determine the ROI of your digital marketing efforts. There are a few different types of calculations that you might deploy to help yourself determine the total ROI on your digital marketing choices. For example, you might try out this formula:
ROI = Net Profit/Total Cost *100
This is a simple formula, but it will help you determine the ROI of a brand-new marketing campaign. You are simply looking at the profits that you generated from the new campaign over the total cost of running that campaign. This is an easy way to see if things are headed in the right direction. There might be many other factors that you want to look at though. Don’t forget to examine every aspect of your digital marketing efforts that you can from a mathematical perspective.
Predicted ROI = Predicted Return – Cost of Marketing/Cost of Marketing * 100
Using this formula, you can get a figure for what your predicted ROI should be for any given marketing effort that you make. This can help you set expectations for yourself and better determine if you are on target with the kind of expectations that you have for your digital marketing campaign. This formula is a bit more subjective than the other, but it can still be useful in setting expectations for yourself and your team.
Measure Your Digital Marketing ROI Today
You need all of the details that you can get your hands on regarding your digital marketing ROI. Make sure you follow the steps that we have listed today to help estimate the ROI that you can expect from those advertisements. For more information about how to get started, reach out and contact us today.
