Conversions are the goal. Whatever those may be – opt-ins to newsletters, providing an email address for more information, or actually making a purchase – the goal is to get the target to do something you want them to do. And so, measuring the ROI of a campaign means measuring the numbers and types of conversion that are actually achieved as a result of a campaign.
This can be a challenge.
What is a Good ROI?
The measure of a good ROI is not carved in stone, for every organization has a different goal for any campaign. However, we can say that if, for every dollar spent, there is more than $1 in return, a campaign can be considered successful.
But what if the return cannot be measured in dollars? What if the goal of a campaign is not a sales amount? What if it is focused on other types of conversions? How, then, do you measure that ROI? There are some guidelines for doing this, and let’s take a look at them.
ROI is, above all, a measurement – a measure of the results of some marketing effort – based upon key performance indicators (KPI). And, in order to measure and prove a good ROI, those indicators must be identified and defined up front. As a marketer, you must define those KPI’s, so that everyone is aware of the goals.
As a marketer, you have to own the campaigns that you implement and the projected ROI that you devise. And you are responsible for analyzing the activity that shows how each campaign is performing. To do this, you will be measuring different types of activity, depending on your goals for each campaign.
So, let’s take a look at the various types of campaign goals and how you can measure them. The first step in determining ROI is identifying the metrics by which the campaign will be analyzed. And those metrics should allow analysis in real-time, so that you can track the performance indicators you have identified.
1. For E-commerce Marketing Campaigns
These campaigns can range from spreading brand awareness, to acquiring leads, to nurturing those leads, to ultimate purchases. Metrics you will want to use include the following:
• Website Traffic: You are looking for an increase in traffic over time, once a campaign has been launched.
• Subscriptions and Opt-ins: You are tracking the increase in newsletter subscriptions, the opt-ins to receive special offers via email, or a request for more information about a product or service.
• Accepting a free trial offer, placing items in a shopping cart, or making an actual purchase.
2. For Lead Generation Campaigns
The goal of these campaigns is to bring customers to the top of a sales funnel. One of the things you will want to track is where those leads are coming from. Your campaign may include blog posts, ads and posts on social media, backlinks from other sources, etc. To really analyze the performance of a campaign, you will need to know the sources of your traffic. The results can be analyzed by:
• Increase in website traffic
• Live chat conversations in responses to questions/requests
• Attendance at webinars, podcasts, and live events, along with acquiring contact information of attendees
• Lead volume, as well as quality of leads and additional conversion rates, including sales.
3. For Content Responses
Brand awareness and spread is highly dependent upon content that is created in a variety of places – on a blog, through email, on social media platforms, etc. Tracking the journeys of all types of content is important, because it allows marketers to determine what is working and what is not. Performance indicators include the following:
• Website traffic and average amount of time spent on each page
• Numbers of comments, likes, shares from specific content venues
• Traffic from backlinks of content that has been placed on major social platforms, other blogs, forums, and niche-related social channels
What is Considered a Good ROI?
There are averages benchmarks that can certainly be considered when analyzing your own. For example, marketers using Google Adwords realize an average of 2.45% rate of conversion. And percentage of sales seem to be highest from direct marketing and emails (8.9% in the U.S.), and lower from social media. But again, these are averages.
Performance Metrics Based Upon History
While industry averages are certainly good to look at, the real measure of ROI benchmarks is a comparison with the performance prior to the current campaign. In this way, you can identify the channels that are performing well and those that are not. In the end, you may be able to get more “bang for your buck” by focusing on the performing channels.
Content Marketing Stands the Test of Time
The combined results of a Nielson and Profit Works study show that email and SEO efforts actually result in higher ROI, when compared with other types of marketing campaigns. And these two venues rely on content, not direct advertising.
When marketers craft compelling, unique, and valuable content, it has “staying power,” is indexed by search engine bots, and shows up in generic searches.
When great content is also presented through emails, with compelling subject lines, the open rate is greater.
Marketers can track search engine rankings; they can track traffic to their content, along with likes and shares; they can track open rates of emails. And these numbers are valuable, even if they don’t result in short-term sales upticks. Over time, they will. Patience is in order.
Marketing Director for Pick Writers, translation review website, puts it this way: “We have spent buckets of money on direct advertising. And we will continue to use these marketing venues. But what we have discovered, through our metrics analysis, is that we generate more leads and ultimate sales through out content efforts. When we can present value to potential clients via content, they respond.”
ROI can certainly be seen as a “numbers game.” And it should be. When marketers launch campaigns, they must be willing to identify the KPI’s of those campaigns in numerical terms. How much more traffic have they generated? What has been the increase in lead generation compared to that before a campaign has been in place for a specific period of time? How many more opt-ins have been generated? And yes, ultimately, how much revenue has been generated in comparison to the cost involved?
But there is also a danger here. Companies can obsess on looking for a positive ROI in short order when, in fact, a campaign may be much longer-term before results can actually be seen. Find the balance. Set up the KPI’s, track results in real-time, eliminate those campaigns that are clearly not working, and allow those that seem to be getting results the time they need.
Elisa Abbott is a freelancer whose passion lies in creative writing. She completed a degree in Computer Science and writes about ways to apply machine learning to deal with complex issues. Insights on education, helpful tools and valuable university experiences – she has got you covered.