It’s the moment every marketing director fears.
That moment when they’re called into the boardroom and asked: “What ROI are we getting from this marketing spend?”
The cold sweats.
The panic that sets in at this point when you’re being asked to explain why those thousands of pounds you’ve spent amassed a grand total of 30 Facebook looks and a few extra X followers.
OK, it’s never that bad, really. But ROI from digital marketing is always a challenge.
But, it really doesn’t have to be. Here’s a few things to keep in mind if you’re looking to get better ROI from digital marketing.
Set ROI goals
With every campaign, you should start by establishing realistic goals before working out the best way to achieve them.
A popular way of doing this is to use the ‘SMART’ strategy to set goals that are:
- Specific – descriptive instead of vague, with reference to specific numbers.
- Measurable – using appropriate data collection and analysis tools to monitor progress.
- Achievable – ambition is great, but you should stay realistic.
- Relevant – keeping your ROI goals in line with your wider business goals.
- Time-bound – having a time limit or target date to increase motivation.
For example, you could make the vague goal of increasing ROI into a ‘SMART’ goal by clarifying that you want to increase lead conversions by 25% in six months.
Your ROI goals and their achievability will depend on various factors like your past performance, market demand, cost structure, and industry changes.
The campaign type will also affect the ROI, which will be different for a content campaign than a PPC campaign.
Focus on the relevant analytics to map your progress in line with historical data and current trends, so you can find ways to improve based on your measurements.
A good ROI ratio for digital marketing is 5:1, meaning you earn £5 for every £1 spent, and anything higher is considered an excellent ROI in most industries.
Set a target ratio that’s realistic for you to achieve within your defined timeframe, using strategies that also support your broader marketing goals.
One way to automatically boost your ROI is to assign budgets wisely and cut your spending wherever possible.
You should be constantly keeping tabs on marketing costs, so if you identify any areas that are getting poor returns, cut back and allocate the funds to a more successful area instead.
Invest in areas with a higher ROI and use technology that fits within your budget to monitor performance and collect client data.
Analysing this data helps you figure out what’s working and what isn’t, and adjust your investments accordingly.
If you have a very limited budget, it’s even more important to invest in the right marketing strategies to get the results you’re aiming for.
For example, content marketing costs 62% less than traditional marketing methods yet produces three times as many leads, resulting in a higher ROI.
It might also be possible to increase your marketing budget by cutting costs elsewhere in the business, such as reducing overheads.
Track metrics that matter
Focusing on the wrong metrics can distract you from your ROI goals and end up wasting time and money.
‘Vanity metrics’ like the number of followers or post likes on social media accounts are good for brand awareness, but they don’t necessarily correlate to profits.
These metrics aren’t key performance indicators, so you should be paying more attention to more valuable engagement and conversion metrics.
The specific metrics you should focus on depends on the campaign type and strategy, but here are some general metrics to keep an eye on:
- Click through rate
- Unique visitors
- Bounce rate
- Repeat views
- Contact form completions
- Email unsubscribe rate
- Leads acquired
- Conversion rate
- Cost per acquisition
- Customer lifetime value
The metrics you choose to monitor should be relevant to your specific ROI goals and track opportunities for business growth.
Monitoring these metrics will reveal which activities actually drive results and which areas need modifying to better connect with the target audience.
Focus on user experience
You won’t gain customers and boost conversions to increase your ROI if you aren’t catering to what your target audience actually wants.
Optimising your website and marketing copy to suit customers’ needs is key to keeping them on board for the full conversion journey.
Everything must be fully functional, with a fast loading speed and attractive layout.
To improve user experience (UX), you should focus on using:
- Content that answers queries
- Headlines with keywords
- Calls to action
- Relevant images
- Easy navigation
- Consistent design
- Redirects for 404 pages
- Personalised copy for retargeting
Around half of people use mobile phones for shopping, including product research and ‘window shopping’ that later turns into sales.
This makes it vital to optimise your website for mobile users, as well as optimising emails that are likely to be opened on a mobile phone.
Another element of providing a good experience for people using different devices is providing relevant content in the formats they prefer (see the content section below).
Use your tracked metrics to identify what people are looking for and what they aren’t interested in, then adjust your strategy as needed.
It’s especially useful if you can gather direct feedback from your target audience via methods like customer surveys.
Experiment with A/B testing
Don’t make the mistake of assuming you know your customers’ preferences better than they do.
Frequently experimenting with different approaches allows your audience to tell you indirectly what resonates with them.
Testing different variations of campaigns lets you discover which designs are most likely to increase ROI, so you can invest in the more effective version.
There’s a free tool called Google Optimize for running A/B tests, which involves making two versions of an ad, page, or campaign element with one different aspect.
Tracking user responses to the different versions will reveal which tactics are more successful, so you know what to focus on in the future.
Here are some examples of elements you could change up for A/B tests:
- Copy, headlines, or calls to action
- Design, colours, or graphics
- Navigation links style or placement
- Contact or checkout processes
- Promotional offers or discounts
- Frequency of messaging
You can also experiment with various marketing channels, including email, paid ads, social media, and video, to see which channels customers respond to more.
Consistently running tests helps you to see how small changes affect buyer behaviour, so you can refine your marketing campaigns and even apply insights to other business strategies.
Increasing engagement this way will ultimately improve your ROI.
Add marketing automation tools
Automation technology is extremely helpful for managing multiple aspects of your marketing strategy in one place.
Automating repetitive tasks makes the process more efficient, reducing costs and allowing your team to focus on other areas that require more creative effort.
Here are some of the things that marketing automation tools can do for you:
- Manage social media accounts
- Send emails at certain times
- Send messages triggered by specific actions
- Personalise content
- Organise and analyse data
- Segment subscriber lists
- Track leads and campaign results
- Provide customer service via AI chatbots
Automation has the benefit of reducing manual human error and boosting productivity in other areas, while still targeting customers across multiple channels and improving customer retention.
These tools can help you to accomplish more with fewer resources, maximising your digital marketing ROI.
Use predictive modelling
Predictive modelling is another useful tool for measuring and increasing ROI.
Previously only used for projecting sales prior to campaign launches, predictive modelling now lets marketers use various data to interpret contextual information about target customers.
It uses AI and machine learning to gather insights from huge ranges of data to predict consumer behaviours.
The results will help you develop informed marketing strategies that your target audience is more likely to engage with.
Analytics from predictive modelling can identify your ideal customer base so you can prioritise relevant leads, improving conversion rates and therefore ROI.
Create useful content
Conventional content about sales isn’t going to get noticed when people are bombarded with ads and emails every day.
To make your content stand out, you need to create well-written informative pieces that incorporate expert SEO techniques to boost their online visibility.
Prioritising content is an effective way to increase ROI, as 72% of companies use content marketing to improve their engagement, and blogging in particular is 13 times more likely to result in a positive ROI.
To achieve the best ROI, your content should always be:
- User-friendly – break it up into easy-to-read paragraphs, use subheadings and lists.
- Visually engaging – include relevant images, infographics, or videos.
- Valuable – provide accurate and relevant information that answers a query.
Potential customers will be looking for content that solves their problems in appealing ways, which is why quality is more important than quantity.
It’s also important to format and share content in the right places, from website blogs to social media posts.
Conduct keyword research and use your analytics tools to determine which topics people want to read about, then tailor your posts in response.
Implementing user-generated content like product reviews and photos from customers is another way to build trust so people are more likely to buy the product.
Well-developed content will keep readers engaged for longer periods of time and increase their interest in making a purchase.
It’ll also boost your reputation as a credible authority in your industry and continue to generate traffic over time.
The better your content is, the greater the positive impact it’ll have on your ROI.
Seize relevant opportunities
Identifying actionable opportunities for marketing strategies is key to elevating brand awareness, attracting more customers and encouraging them to convert.
Seize-the-moment marketing is growing in popularity due to the fast pace of social media, with brands quickly jumping on emerging trends to connect with their audiences in real time.
However, you should avoid styling your content around a topical interest with a short life cycle just because it’s fashionable – for instance, you wouldn’t use memes in your marketing if it didn’t suit your brand’s voice.
It’s better to seize opportunities with longevity that align with your brand’s values and the values of your target customer base.
A prime example is US retailer Patagonia, which adopted highly purpose-driven ‘cause marketing’ in the early 2010s, resulting in a 30% increase in sales in 2012 alone, and quadrupled revenue over the decade from 2008 to 2018.
The outdoor apparel brand invests heavily in environmental awareness and activism, which resonates with the ever-growing numbers of ‘green consumers’ looking for sustainability and transparency in the brands they purchase from.
It pays off over time to align your brand with current and ongoing consumer concerns and present your products and processes as part of a long-term solution.
You can identify relevant concerns through your research and data analysis, as well as by paying attention to coverage of social movements.
Continuously monitor results
Research reveals that the highest performers in marketing are driven by data, with 72% of companies attributing their success to monitoring their ROI.
Consistently increasing ROI is impossible without regularly tracking measurements to analyse their effectiveness.
When you set your ROI goals at the start, you should also set out a plan for monitoring the relevant data at frequent intervals.
This way, if something isn’t working, you can quickly figure out adjustments, or identify alternative areas to focus on that are more successful.
We’ve already discussed which metrics to track, testing different formats, and utilising automation and modelling tools to help you get the best results.
The next step is to simply keep an eye on these things and apply the insights you gain from them.
There’s really no strict ROI formula in digital marketing to follow – it’s a process of committing to a strategy and constantly learning from the results to make overall improvements.
All of these tips should help you to understand what you can do to improve your ROI with digital marketing.
If you’re not sure how to implement these ROI tactics and you’re interested in outsourcing to a digital marketing agency, contact Paramount Digital today for help with your digital marketing ROI.