Measuring ROI

Marketing Executives Tell Us How They Really Feel

  • 52% - "It's challenging to connect marketing goals to business objectives in ways that defend budget requests."
  • 50% - "Its difficult to attribute marketing activity directly to revenue results to justify budgets."
  • 81% - "It's a struggle to assess how well brands perform across platforms and devices."
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"If marketers had a greater ability to track ROI, more than 75% would increase spending in cross-channel efforts and individually in mobile, online advertising, TV and other traditional channels."

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Measuring ROI
& Attributing Success to Digital Marketing

1

ALIGN GOALS
TO BUSINESS OBJECTIVES

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2

DETERMINE
METRICS METHODOLOGY

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3

IDENTIFY
KEY PERFORMANCE INDICATORS (KPI's)

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4

SETUP A SYSTEM
OF
MEASUREMENT

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5

CALUCLATE
RETURN ON INVESTMENT (ROI)

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1
ALIGN GOALS TO BUSINESS OBJECTIVES

What digital marketing wins are you trying to prove? Perhaps you want to show your boss how your work adds value. Or maybe you are the boss and you want to know what specific investments were fruitful and how much to budget next quarter. Start by thinking of your overall business objectives for a campaign. Then decide what marketing activities you'll employ to achieve these objectives. Next you'll be able to align your business objectives and marketing activities with metrics and goals.

To track a PPC campaign, an organization may try to increase new visitors to their site through paid advertisements (goals) to increase sales or conversions (business objectives). Another business may produce blog articles they hope will rank well on search engines for relevant keywords (goals) to increase brand awareness and organic search visits (business objectives).

Consumer Conversion Funnel

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Helpful Tips

Look at the Consumer Conversion Funnel (top). We've arranged digital marketing activities by stages. After defining your goals, select an activity from the following stages to track: Attract, Engage, Nurture and Convert.

2
DETERMINE METRICS METHODOLOGY

If a marketing activity directly leads to sales or revenue it generates a Hard ROI. Hard ROI Activities, including sales or conversions, show a directly quantifiable impact on your analytics that is tracked as a dollar value. Let’s say a new visitor clicks on a PPC ad to complete a purchase on your website. You can measure this direct attribution knowing the value of the PPC ad and transaction generated. The right tracking tools allow you to attach UTM parameters (or tracking links) to different marketing campaigns, thus allowing you to track the Hard ROI stemming from these efforts.

If a marketing activity does not directly lead to a sale it generates a Soft ROI. Soft ROI is equally important to track though not as easy to link to immediate financial gains – until now. Software today makes it easier to track Soft ROI than ever before by connecting your CRM, website analytics, marketing automation and customer success platforms. Soft ROI is tracked as a lead scoring points system, or can also be calculated using ad spend values needed to generate the same results.

Hard ROI Examples:
  • Product Purhcases
  • Customer Acquisition
  • Website Traffic
  • Email Address Acquisition
  • Conversion Rate
  • Increased Sales Transactions
  • New Leads Generated
  • Coupon Redemption
  • Landing Page Submissions
Soft ROI Examples:
  • Improved Brand Lift
  • Improved Brand Reputation and Awareness
  • Increased Word-of-Mouth Advertising
  • Brand Mentions
  • New Social Followers
  • Social Likes, Shares, Comments, Pins
  • Photo Views
  • Video Plays
  • Customer Retention

Whether directly or indirectly connected to immediate financial success, tracking Soft and Hard ROI initiatives is integral to the holistic long-term success of your organization and should both be assessed by your marketing team.

3
IDENTIFY KPI's

Now that you have your goal in mind, you need to figure out what metric(s) to track. Key Performance Indicators separate meaningful information from an abundance of data. Have you been successful in achieving specific goals and initiatives? There’s a KPI to prove it. Check out the activities and KPI’s chart (right) and select the KPI that aligns with your goals so you track progress and prove overall effectiveness in your campaign.

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  • SEO / Impressions, Site Visits by Source or Channel, Visit Duration, Bounce Rate, Conversions
  • Pay Per Click Ads / Page Views, Click Through Rate, Conversions, Cost Per Acquisition
  • BLOGGING / Organic Visits, Return Visits, Bounce Rate
  • LANDING PAGES / Form Submissions, Transactions
  • SOCIAL PUBLISHING / Followers, Engagement, Site Visits, Conversions
  • PERSONALIZED CONTENT / Clicks, Views, Visits, Bounce Rate, Content Shares, Conversions
  • DOWNLOADABLE CONTENT / Downloads, Form Submissions, Clicks
  • FORMS / Page Views, Form Submissions, Traffic Source
  • EMAIL MARKETING / Delivery, Subscribers, Open Rate, Click Through Rate, Conversions
  • FREE TRIALS / Free Trials Redeemed, Lead Source, Trials Turned to Paying Customer
  • DEMOS / Demos Generated, New Leads, Lead Source, Demos Turned to Paying Customer
  • COUPON REDEMPTIONS / Coupon Redeemed, Order Value, Coupon Source

4
SET UP A SYSTEM OF MEASUREMENT

Google Analytics provides helpful data that with some customization can help you draw insights from marketing activities. Digital Marketing Platforms provide built-in data-backed insights and multi-touch attribution making it easier to track indirect influences on revenue, like social ROI or content ROI. A marketing platform collects the valuable data points you need and will even alert to you important interactions between leads or when a lead is likely to close. Overall, analyze conversion and attribution activities on a weekly basis to stay on track.

Digital Marketing Tracking Tools like Bridgeline’s Unbound Platform offer robust reporting capabilities enabling you to track and measure goals over time and optimize campaigns based on changes evident in key metrics

Contemplating a digital marketing platform? Choose one that centralizes data from other sources in your cross-channel and cross-device integrated marketing strategy like Google Analytics, Google Adwords, paid media platforms, social platforms, email marketing etc. Tracking the cross-channel customer experience paints a holistic picture so you truly know what activities were most influential in their conversion.

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5
CALCULATE ROI - Various Industry Examples

Let’s say you’re a CMO for Drone Zone, a company that manufactures drones. Your job is to ensure that a new model, The Quadcopter 2000, is priced accurately to cover marketing and manufacturing costs.

What information do you need to capture?

  • Social Media Management: $2000 per month
  • Search Engine Optimization: $1800 per month
  • PPC spend: $2000 management + $10,000 ad spend per month = $12,000 per month
  • Email Marketing: 2 email blasts - $800 per month
  • Graphic Design Content Costs: $1600 per month

The Quadcopter 2000 sells for $2,000 per unit and 500 units were sold during the course of this campaign. To keep things simple we’re going to focus on one isolated campaign over the course of one month.

  • Calculate Revenue:

    Campaign Sales: $1,000,000 for 500 units sold

  • Calculate Investment:

    Monthly Marketing Expenses: $18,200 over one month

  • Calculate Return ($):
    • Return = Revenue – Investment
    • Return = $1,000,000 – $18,200
    • Return = $981,800
  • Calculate ROI (%):
    • ROI = Return ÷ Investment
    • ROI = $981,800 ÷ $18,200
    • ROI = 53.90 or 5390%

For every $1 of monthly marketing expenses, they earned $53.90 back.

You’re a Social Media Specialist for Just Mail It, a company with multiple locations that provides U.S. passport renewal services and sells mailing supplies. A recent social post on Facebook encouraged followers to schedule appointments at the nearest retail location to renew their passport. You’ve set up tracking links to track exactly how many people converted from these social posts.

What information do you need to capture?

  • Tracking Link Clicks on Social Posts: 15,000 clicks
  • Appointments Fulfilled / Passport Renewals Submitted: $1,750
  • Passport :Renewal Fee : $110 per renewal
  • Graphic Design Cost for Social Post: $350
  • Comparable Cost of Reach If Using Facebook Ads: $4050 = 15,000 clicks x $0.27 Cost Per Click

Just Mail It earns $110 per U.S. Passport and 1,750 renewals were processed during this campaign. Here we will use the comparison method to assign value to an organic social post by what it would cost to generate the same amount of clicks via paid Facebook advertising.

  • Calculate Revenue:

    Campaign Sales: $192,500 = 1750 renewals x $110 fee

  • Calculate Investment:
    • Expenses: $350 Design + $4050 Comparable Facebook Ad Price
    • Expenses: : $4350
  • Calculate Return ($):
    • Return = Revenue – Investment
    • Return =$192,500 – $4350
    • Return = $188,150
  • Calculate ROI (%):
    • ROI = Return ÷ Investment
    • ROI =$188,150 ÷ $4350
    • ROI = 43.25 or 4325%

Comparing results to Facebook ad campaigns, for every $1 they would’ve spent, they would’ve gotten $43.25 back. This calculation enables you to assign value to the organic post based on the response it engendered with Facebook followers.

You manage ad sales for The Fitted Sheet, a home goods retail store that also generates revenue from ad sales hosted on your website at $10 CPM, generates $100 per email for each sponsorship of your monthly email blasts and an additional $2.25 for each email opened. You invested $1500 to boost results by running a Google Adwords campaign and spent $400 to have the email professionally designed

What information do you need to capture?

  • Page Views: 15,000
  • Email Opens: 3,000
  • Ad Revenue Per Sponsored Email: $100 per email
  • Google Adwords Spend: $100 management + $1000 ad spend per month = $1100
  • Email Design Costs: : $400 per email

Now let’s calculate how much revenue The Fitted Sheet brings in through hosting ads on their site and through email sponsorships.

  • Calculate Revenue:
    • Page Views: $100
    • Email Sponsorship Revenue: : $4350
    • Email Impressions: $6,750 = 3000 opens x $2.25
  • Calculate Investment:

    Campaign Marketing Expenses: $1,500 = $400 + $1500

  • Calculate Return ($):
    • Return = Revenue – Investment
    • Return = ($150 + $100 + $6,750) – $1,500
    • Return = $1,000
  • Calculate ROI (%):
    • ROI = Return ÷ Investment
    • ROI = $5,500 ÷ $1,500
    • ROI = 3.66 or 366%

For every $1 of expenses through Google Adwords and Email Design, they earned $3.66 back.

You are a Marketing Director for Stirectaripin, a pharmaceutical company that wants to boost brand awareness on social media for a new medicine called Mirazine. You’ve chosen to test out Facebook and will blend organic and paid methods to drive awareness for one month. You’ve invested $6,400 to generate 20,000 clicks.

What information do you need to capture?

  • Social Media Management: $3000 per month
  • Website Visits from Organic Facebook Post: 17,000
  • Newsletter Signups: 400l
  • Actual Facebook Ad Cost Per Click: $0.32 per click x 20,000 clicks = $6,400
  • Email Design Costs: : $400 per email

Stirectaripin has installed a Marketing Platform that tracks each interaction with website visitors. Each time a contact interacts with them, they boost their lead score by 1. Based on past campaigns, each time a lead score increases by 1, Stirectaripin earns $10 in drug sale revenue.

  • Calculate Revenue:
    • Page Views: $100
    • Email Sponsorship Revenue: : $4350
    • Email Impressions: $6,750 = 3000 opens x $2.25
  • Calculate Investment:

    Campaign Marketing Expenses: $1,500 = $400 + $1500

  • Calculate Return ($):
    • Return = Revenue – Investment
    • Return = ($150 + $100 + $6,750) – $1,500
    • Return = $1,000
  • Calculate ROI (%):
    • ROI = Return ÷ Investment
    • ROI = $5,500 ÷ $1,500
    • ROI = 3.66 or 366%

For every $1 of expenses through Google Adwords and Email Design, they earned $3.66 back.

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