The digital age is awash in with tools to measure your digital marketing related data, such as your level of engagement on social media platforms, the number of leads generated or leads lost, and how this has affected your revenue. So, with all of this data at your fingertips why are marketers struggling to prove they are worth their fee and that you are getting a good return on your investment (ROI)!
The answer could be that digital marketing campaigns are being scrutinised too early in their process and not being given a chance to develop and grow. When ROI is measured too quickly (i.e. in less time than the length of the sales cycle), the metric measured isn’t actually ROI. In fact, the metric measured may be a key performance indicator (KPI). These KPIs are a useful metric, but shouldn’t be confused with ROI.
To effectively measure and report on ROI a marketer has to have a realistic benchmark and that would be the average length of their sales cycle and a standard B2B sales cycle can last anywhere from one month to 2 years!! So to measure ROI at a month or two into the cycle is a complete waste of time. However, clients are demanding this data, in essence looking for justification of the marketer’s fee, putting them under intense pressure to prove the ROI of their efforts to secure additional budget and earn recognition. It’s important to realise that ROI is a marathon, but too many marketers are being forced into a sprint!
With all of this in mind we think It’s time to rethink ROI:
Don’t obsess on ROI
Some marketers don’t even bother to look at ROI. They might look at their bottom-line results, or trust their instincts that the campaign is working. Make sure to measure your results and compare them to the costs you put in, or you will never have a true idea of the health of your campaign.
Incorporate all relevant costs
Ad placement and retainer costs are easy to calculate, but it’s easy to neglect the cost of time expended by yourself and your team. Without this key piece of information, your formula will probably be off.
Don’t compare apples with oranges!
What are you comparing your ROI to? Different campaigns yield different results. Make sure you’re comparing ROI figures with as few differentiating variables as possible if you want to draw meaningful conclusions; for example, compare the same campaign’s return, year over year.
Make sure to incorporate intangible benefits
Your ROI isn’t just about how much new business you got directly from the campaign. You also need to consider less tangible factors, like how your brand awareness or brand reputation have changed.
Don’t make the call to cancel a campaign early
A negative ROI doesn’t mean you should abandon a campaign altogether—in fact, some marketing strategies almost always begin with a negative ROI, gradually ramping up to a more positive one. Always consider your results in context.
As a leading marketing agency, we will deliver for your business. Whether it’s improving the ROI or developing your brand through social media engagement or enhancing your conversion rates, Caffeine Marketing can help.