Your Return on Investment for Internet Marketing Services
By
VendorSeek
Are you keeping track of your marketing dollars? Is your money being well spent? Traditional forms of marketing such as billboards, newspaper/magazine ads, and television commercials are still available, but not as popular as in prior periods.
What platform hosts the new school of marketing? The same place where millions of buyers go everyday: the Internet. Advertisers are using methods such as banner ads, pay-per-click ads, and search engine optimization to drive traffic to the sites that host their products and services.
Despite the evolution of marketing, the concerns remain the same. Is my company profiting from marketing? Essentially, is the advertising making the buyer do what I want them to do?
The following article has been established to help you assess your return on investment regarding Internet marketing.
ROI defined There are long, obfuscated definitions of ROI out there; the following is not one of them. ROI is any event in which your financial endeavors achieved what they were originally set to do. For instance, people bought your products because you placed an ad in a newspaper. Originally, you placed the ad in the paper to get customers to buy, and that is what happened. You received a return (customers buying your product) on your investment (money spent on placing the ad in the paper).
Measuring your ROI You will be able to measure your Web marketing campaigns by answering four questions:
- What goal am I trying to accomplish with your site?
- What is the value each time I accomplish that goal?
- How many times did I achieve that goal?
- How much did it cost to achieve my goal?
Your site This is not a difficult question. You are trying to generate revenue. How are looking to do that in using your site?
- By selling products directly?
- Generate leads?
- Generate interest in a particular product or service?
- Educate the public?
Once you understand the purpose of your site, then you can determine how you can gauge when the purpose has been met.
Ex:
- The customer gets a receipt
- A customer contacts you to buy your product/service because they viewed your site
- A customer contacts you because your site has piqued their interest
- A customer has accessed a particular page on your site
Your site’s goals can vary, but you need to be able to ascertain if you are accomplishing them and if they are generating revenue.
The value of the goal You have to determine your goal’s value to the company each time it is achieved. Each goal can vary, so exact returns may not be obvious (such as figuring the value of an article on your site educating about your products/service), but you will be able to get an accurate idea.
If you are selling things online, it is easy to assess your ROI. For instance, if you invested in pay-per-click, you would determine how much conversions were made against the cost of the marketing method.
Ex.
You made $2,000 from conversions made possible through pay-per-click ads. The charge was $1.00 per click and your ads were clicked on 500 times. You can figure that you had to pay $500 (500 clicks x $1 per click) for the campaign, but the endeavor made you $2,000. Your ROI would be $1,500 ($2,000 total gross - $500 for the investment).
How many times the goal is achieved In the above example, we mentioned the ads were clicked on 500 times. We were able to determine how much money was made from the endeavor, but you have to determine how many time browsers are clicking on particular ads and then making a purchase.
Some systems such as Google Adwords provide built-in conversion tracking, so you can assess how much money you are investing, the campaign is making your company, and what particular ads are being clicked and provoking sales.
It is important to know what specific ads are popular, so that you can model future ads in the same fashion.
How much did it cost to achieve the goal? It is of great importance to know exactly which campaigns are working and which are not. Depending on what you offer (goods or services), some methods may be better than others. For instance, if you are a site that sells products online, it may be wise to invest more money on SEO services and pay-per-click ads; because you are exclusively on the Web, you will want to be all over it.
Determine where your highest ROI lies. It would be wise to pour more funds into that campaign until you can modify using other techniques that have been delivering a poor ROI.
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