return on investment for various digital marketing strategies
Digital Marketing

Method To Calculate Digital Marketing ROI

Digital marketing includes various marketing strategies which directly raise your return on investment. In the following article, we will discuss how different digital marketing strategies give the best return on investment. In this article, we are going to discuss how the company spend the budget on digital marketing services and analyze the expecting result.

picture of ROI in digital marketing and how to calculate

Search Engine Optimization ROI Analysis

To check return or revenue generated by the Search Engine Optimization is not that much easy. Because in SEO case, it is not easy to find your money makers

So produces more return through SEO is not easy to check. The only way to measure company return is when the connection between increased revenues and your SEO efforts explained entirely. To know better about the company ROI, you have to check the way company revenue increase and cuts costs at the same time.  

Content Marketing ROI Analysis

Content marketing has a different formula to calculate the cost of creating content against the revenue from that content.

First, you have to figure out how the company spends to produce the content. In this section, you have to include the content creator’s salary and work done by other departments.

Second, you have to figure out the cost to distribute the content. In this section, you have to include paid promotion and tools or software used to create the content.

The third step is to calculate the sale that comes directly from the sale.

The fourth and final step is to calculate your content marketing ROI. This section includes a simple content marketing ROI formula, ie. Return minus investment, divided by investment, expressed as a percentage.

Social media marketing ROI Analysis

One of the other digital marketing strategies includes Social media marketing, and different tools to calculate ROI for this strategy are below discussed. The first tool we will discuss is the Social ROI calculator. This tool is free to calculate the return on your social media investment.

The second tool is Google Analytics. This tool is one of the most powerful tools for the ROI of social media. This tool helps to tell investors about the impact of social actions they are creating in social media marketing.

The third most important tool is Facebook Pixel. This tool includes a piece of code of a website that allows you to track conversions from Facebook ads.

The fourth important tool is Hootsuite Insights. This tool helps to find or identify the latest trend and transformations related to your industry.

PPC marketing ROI Analysis

PPC marketing .i.e. pay per click marketing plays an essential role in digital marketing strategies. Google AdWords and the pay-per-click auction process is very crucial to the success of any campaign, also for understanding a business’s financial metrics. In Pay Per Click, there are few fundamental formulae used to calculate the ROI.

Determining the return on ad spend (ROAS)

ROAS is simply PPC revenue minus PPC cost, divided by PPC cost, expressed as a percentage. When you discuss ROI, you are talking about your PPC spend in a multidimensional way.

Determining Return on Investment

ROI calculates your pure return on investment, given the total costs of running your business. The calculation is the same as return on ad spend is profit minus cost, divided by cost.

Determining Profit Per Impression and Profit Per Click

Cost per click is the metric to calculate how much each click cost you. It is most important to determine how much each click is costing you and determine the lowest cost for the highest number of clicks.

To calculate, you need data for impressions, clicks, total cost, and total sales value. For calculating profit, you have to subtract the total cost from the total sales value. 

To calculate profit per impression, divide profit by impressions, and to calculate profit per click, divide profit by clicks.