Return on Investment (ROI) is a popular profitability metric used to evaluate how well an investment has performed.
Digital marketing ROI is the measure of the profit or loss generated by digital marketing campaigns.
The fundamental formula for calculating your digital marketing ROI:
ROI = (Gains from the investment – the cost of investment)/(cost of investment) × 100
The fundamental terms for calculating your digital marketing ROI:
Total revenue = the total value generated by the sales of a campaign
Gross profit = total revenue, minus the cost of what producing or delivering a product or service represented
Net profit = gross profit minus any additional costs (creative, technical costs, sales costs, campaign costs, etc.)
Digital Marketing Channels which helps to generate Highest ROI
Email marketing is one of the important ROI channels in Digital Marketing. Emails are an effective way to connect with customers, build subscriber lists and build brand loyalty.
It has a major impact on conversion and earning profit. Metrics in Email Marketing that helps to measure ROI include click-through rate, bounce rate, unsubscribe rate, conversions, and leads acquired.
SEO(Search Engine Optimization)
SEO optimizes your website to improve organic search rankings which in turn increases sales. Search engine optimization is a powerful digital marketing channel that delivers higher ROI.
Paid Search and PPC
PPC stands for pay-per-click. In PPC, advertisers pay an amount each time one of their ads is clicked.
Search engine marketing (SEM) uses paid tactics to position companies on the first page of search results.
Social Media Marketing
Social media networks(Facebook, Instagram, Twitter, and LinkedIn. ) enable brands to build relationships with their customers. It facilitates two-way communication with them. This channel is an effective way to reach audiences that may be unreachable through other channels.
Metrics in Social Media Marketing that helps to measure ROI include Engagement rates, clicks and click-through rate, conversions, leads acquired, and new fans or followers.
Content marketing is a technique of creating and distributing valuable, relevant, and consistent content to attract a potential audience to your website.
Metrics in Content marketing that helps to measure ROI include traffic, clicks, time spent on a page, unique visitors, returning visitors, actions are taken, and conversions.
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