We all want to invest in places that bear us returns. Establishing zero returns on any investment in a business is both draining to you as an individual/business owner and the business itself where the initial investment comes from. When you establish returns on any investment, we call that Return On Investment (ROI). ROI is applicable even in digital marketing. Tracking the progress of your ROI is a good measure of all campaigns ran to better your brand and to track the growth of such things such as brand awareness.
ROI has been misconstrued to mean things going viral or many engagements to a single post. It is important to note that, it is becoming increasingly difficult to have more engagements in the long term without any boosts. Going viral is also a lucky bet based entirely on your content. We, therefore, find that brand growth is a function of market campaigns that involve paid web content. Market campaigns can range from paid promotions on your social media and advertisements with the right keywords on search engines such as Google. For brand awareness, one should put aside a budget for these advertisements. Gaining visibility organically is getting increasingly difficult over time.
Having established that viral posts are a blurred metric for growth, ROI becomes a better measure of growth. In layman terms, ROI is the actual measure of profit or loss that is generated from digital marketing campaigns based on the budget allocated. A negative ROI suggests that you are spending more money than you are bringing in and vice-versa. One cannot ignore ROI. This would be blind marketing. You would not know what works for your brand and what does not. There is no one-shoe-fits-all policy with ROI. One must tailor a strategy that works for their brand as well as establishes what success means to them. Success would mean brand awareness, conversions or lead generation.
Brand awareness means knowledge of your brand by the general public. You must invest in brand awareness before anything else. Brand awareness allows you to navigate the digital space with an assurance that people will learn about you and eventually convert. Note that brand awareness aims to get people to recognize your brand and build confidence in it. Lead generation and conversions often come later.
Most people, however, have defined digital marketing to mean that daily posts on their social media pages. They end up with unmet expectations when daily posts do not generate the expected engagements or conversions. Once you establish what your aim is, defining your ROI becomes easier and one can know what strategies are working for them. Digital marketing is not a sales platform even though many assume this. Redefining your goals and aligning your KPIs (Key Performance Indicators) allows you to track progress and growth easily. KPIs vary with each goal. Your KPI for SEO will be different from your KPI for social media or email marketing.
To measure your ROI, you can use other metrics such as conversions, cost per acquisition, cost per lead and customer lifetime value. Conversion rates can easily be found from your Google Analytics whereas the other metrics have to be calculated. Cost per lead, for example, is calculated by dividing total advertising expenditure by total attributed leads.
Digital marketing is something we pride ourselves in. Digital 4 Africa takes time in teaching people on what works for companies in different market niches. We counsel on what will generate better ROI for your brand as well as take you through the metrics that will work for you.
Fiona Waithira is a content writer for Digital 4 Africa. She also writes her own blog on allthingsprecious.wordpress.com