What is the return on investment in marketing? -data

In such a competitive world, you need to measure strategies that work especially in digital marketing. To measure the performance of your actions, measure the return on marketing investment. This article explains ROI, its importance, methods for calculating it, and how to improve it.

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What exactly is the return on investment in marketing?

ROI (Return on Investment) in digital marketing is defined as an indicator of whether the investments of your marketing actions are yielding positive results in terms of the resources invested.

If this indicator shows a negative value, it means that the expenses are greater than the returns generated by a specific strategy and the company suffers a loss with this measure.

When the opposite happens, it indicates that the action allowed the company to make a profit.

With these numbers on hand, you can determine whether or not your company’s marketing strategy is working. This allows you to base all decisions made on numbers and statistics, not non-reference predictions. Thus, marketing ROI is an essential indicator of the success of any business. Eskimoz Studio tells you how to create content with good ROI.

What is the importance of ROI?

Return on Investment (ROI) allows you to evaluate your various marketing actions in order to improve them. It provides the possibility for the company to assess the impact of its marketing strategy on the target audience.

Thanks to indicators such as ROI, you can adapt your strategy according to your results. One of the most important advantages of digital marketing is the ability to invest on several fronts through different channels and messages.

Within your suite of marketing actions, for example, one may be effective, while the other may not, undermining the entire strategy. By calculating ROI, you can effectively use your company’s resources based on real and practical facts of your communication campaigns.

How do you calculate return on investment?

To measure ROI, you need to consider the different goals of your business for each action. Accordingly, you should follow the performance indicators corresponding to your various goals.

Find out your conversion rate

If the goal of your marketing strategy is to increase conversions, then you need to measure your conversion rate. In addition to traffic, your blog should generate business opportunity through conversions. If your conversion rate is low, it means that your landing pages need optimization.

Know Your Cost Lead (CPL)

For those looking to increase the number of leads obtained, cost per lead stands as a closely watched metric. From this number, you can find out the money invested to get a potential client.

Calculate Cost Per Acquisition (CPA)

If the goal of doing your marketing is to acquire customers and not potential customers, then CPA will help you understand the return on investment. This is the amount invested to acquire a new customer.

In fact, there are an infinite number of pointers to follow depending on your marketing goals and the leverage used. The key is to carefully evaluate each action in order to improve your marketing strategy.

How to improve return on investment?

After calculating your ROI, you will then need to figure out how to improve it. Your ability to adjust different marketing actions ensures the success of your business.

Set your goals

As with any marketing or sales strategy, the first step before putting the plan into action is setting a goal. Does your business need increased brand awareness? Where should you generate more qualified leads?

Whatever your goals, it will be helpful to define exactly what you are looking for through your actions so that you know what to evaluate.

Use the most appropriate pointers

After all, what is the point of calculating a cost per lead if, in fact, your main business goal is to increase the number of customers?

So you should choose metrics that align with the goals of your digital marketing campaigns.

Don’t act on a single marketing lever

In contrast to traditional marketing, the main advantage of digital marketing lies in the versatility of options and possibilities to influence the audience. Therefore, do not direct all of your attention and resources to one or two actions.

Experiment, use different communication channels, change the tone of your efforts, and finally, don’t limit your strategies.

Identify opportunities for improvement

It is not enough to determine a bad result. You have to turn it into an opportunity. Always look for ways to improve the offer to the consumer. Even when the results remain positive, your goal should always be to improve what you offer.

As you can see, a company’s marketing ROI shows whether or not the strategy is working. Before planning your next actions, take the time to measure and improve your company’s ROI.

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