When you have chosen a digital marketing strategy to populate your business then you should take it as an investment. Now a question suddenly pops up in our mind: “how to measure the success of our digital campaign”
Well, the ideal method to inspect the success of the campaign is to compute ROI (Return on Investment) from the digital marketing services campaign. But having several fluctuations, sources, and KPI, it is not as simple as it seems.
Return of Investment (ROI) Might be difficult to analyze
Several metrics are not directly helping in computing ROI, but it can give broad insights. These insights will help you to utilize for better results and marketing. It will gradually bring profit to your business. We have summarized some of the substantial metrics that are used in computing the ROI of digital campaign
1. Customer Lifetime Value (LTV)
Customer Lifetime Value (LTV) obtains insights about what is your paying capacity in ad spending to grab every client beneficially. LTV is significant to recognize because it implements in each type of business.
The E-commerce business can receive a precise evaluation of LTV. If we talk about other business domains, then it might not get accurate data. They might utilize previous consumer data to estimate what LTV may appear. Several case studies are accessible over the internet to understand the LTV.
2. Cost per Acquisition (CPA)
This metrics is about how much you need to pay to acquire a real consumer, not only a lead. Paid digital marketing campaigns can give real-time insights about CPA. However, it doesn’t apply to the SEO campaign. Several digital marketing agencies use a CPA to calculate ROI.
There are no tools required for calculating the CPA. Well, cost per acquisition is measured by your overall spend money divided by the number of acquired customers.
CPA = overall marketing expense / Total Number of acquired customers
3. Average Order Value (AOV)
The Average order value metric is usually ideal for e-commerce business. In these metrics, you will be able to know how much you are paying customers in every phase they buy. AOV is appropriate for the e-commerce industry but today it is also used in many B2B and B2C businesses.
4. Lead-To-Close Ratio (LTCR)
The Lead-To-Close Ratio (LTCR) useful to estimate high-quality business leads. It will give you an idea of how you can do better in the sales section. The metrics allow you to prepare your next digital marketing strategy and improve the overall ROI of the business.
5. Cost per Lead (CPL)
Megabyte is a premier digital marketing agency in Dubai. It has years of expertise in managing digital marketing campaigns for its clients. The digital head of megabyte tells about Cost per Lead (CPL) metrics. Well, the CPL metrics give you data that, if your online marketing tactics are beneficial or not. Cost per lead is normally related to a paid campaign.
Cost per lead is also called cost per conversion. One can estimate CPC in Adwords. If the campaign is not set up and managed accurately then you can acquire dubious CPC throughout the campaign.
6. Return on Ad Spend (ROAS)
The metrics give you data about the revenue generated for your ad expenditure, but including other costs such as costs of product sold. Return on Ad Spend (ROAS) is an effective metric if you want to calculate the only review through digital marketing services. ROAS is beneficial to some extent, but you must estimate your profit margin to identify what ROAX percentage is profitable for your business.
Calculating ROAS in digital marketing
The ROI is digital marketing is = (Net Profit/Total Cost) x 100 and if we talk about ROAS = = (Revenue/Total Ad Spend)*100.
For instance, if you spend 100 INR on ads and receive 300 in revenue, but the price of your product is 100 INR then your ROAS likely to be 300% [(300/100)*100] but your ROI is only 50% [(100/200)*100].
7. Unique Monthly Visitors
Unique Monthly visitors metric give your insight into how many unique visitors are coming to our website monthly. This might be useful to know the sources, location of the visitors.
Calculating Unique Monthly Visitors
One can inspect unique visitors in Google analytics tools and it is automatic. You need not calculate manually. If you want to classify visitors or traffic by source then, you can view as per social, paid and organic, and direct traffic. These insights tell you the exact sources of the traffic and it will help you to forecast your digital marketing campaign in the right way.
Well, digital marketing metrics undoubtedly helpful to estimate ROI. These metrics provide precise insights and useful for further marketing strategies.