You can’t deny it anymore. Digital Marketing is a necessary part of the business world today. Yes, you still need the human touch of traditional marketing, but that won’t give you the reach you need in this digital era. ROI Driven Marketing enables you to know if Digital Marketing is actually worth your effort and helps your business to reach its revenue goals.
Is ROI Driven Marketing Necessary?
The main question people seem to have about marketing, especially digital marketing is, “how do I know it’s working?”. And, it’s a fair question. This is where the concept of ROI driven marketing comes into play. The only way to know if your business is making money or doing well is to see what your return on investment (ROI) is. ROI tells you what works, what should be improved, and what should be removed. It does this by measuring the profit or less that comes from any money spent or invested.
You can apply this measure to your digital marketing! One of the easiest ways is to see how much money you make from an online marketing campaign. For example, you generate a 40% return on investment from your latest Facebook Ad, but only make a 10% return on your more traditional print campaign. This tells you which is more effective.
Lightbulb Moment I figured I should ask a Digital Marketer
So I was sitting here writing, rewriting, deleting, and rewriting this article over and over again. I’m not an expert in this field even though I have enough of an understanding to make use of it. And it finally hit me! Right upstairs is our Operations Director who is an expert in marketing with years of experience! “Took you long enough,” I said to myself. That’s when I decided to make this an interview format with Shane, our OD. “Have you got a few, or many, minutes to spare Shane? I have some questions I need answers to,” I asked. Thankfully he did.
Me, the writer: “Now…what exactly is this ROI Driven Marketing that I’m supposed to be writing about? Why is it important?”
Shane: “It’s basically about you being in control of all your digital marketing efforts, because you want to learn what does and doesn’t work. The reason we love digital so much, is because it gives us the ability to track data live or instantaneously. With this data, you now have the ability to make smart decisions about what to invest in, with the knowledge of the actual returns you’ll be getting from that investment.”
“Another thing is, with any business, you want to learn as fast as possible. The faster you learn from your failures or mistakes, the higher the chance of a better success rate for a campaign or investment will be. In the digital world, the time frame for learning is much much much faster than any offline marketing campaign.”
Me again: “What are the factors you can measure to calculate this?”
Shane: “The basic data points that you’ll need are investment in terms of money and what kind of conversions, in most cases sales, you’re getting from it. This all comes back to the fact that you have to track every single digital marketing effort. If it’s not tracked, you won’t be able to track your digital marketing ROI.”
Yes, once again, it’s me: “What role does data play in marketing and its calculations?”
Shane: “Data is everything in the digital marketing world. Without it, you would only be able to make educated guesses. But with data, you can make factual decisions based on real numbers which can impact your business exponentially.”
“Before we end, I’d like to mention that sometimes ROI isn’t only about sales. It also depends on what your actual goal is. If my goal was to increase views on my videos, it wouldn’t be about the money or e-commerce. My ROI could be about awareness, engagement, or leads. There are multiple possibilities depending on the business objectives you set.”
ROI Driven Marketing To Reach Your Business Goals
Have you ever wondered how much capital you should allocate towards your marketing budget? Or, have you ever wondered if you’re spending your money in the right places? Marketing isn’t an exact science and it’s difficult to quantify its effectiveness. But, one of the easiest ways is to calculate your return on investment (ROI). ROI driven marketing is targeted towards helping your business reach its revenue goals.
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