Measuring marketing ROI?

Of course you measure it!

You need to work out your cost per client.

Say for example you spend £100 on advertising and this gets you 400 leads which then converts in to 40 paying clients. Then your cost per client is £2.5 (100/40)

Now you sell your products at £10 each and because the cost per client is £2.5 you make £7.5 profit on that. So that as a percent is 75% - so this would be your ROMI (gross).

Therefore spending £100 will get you £400 which is a 75% ROMI.

Seob,

In order to track ROI in the way you are talking about, you must set up conversion funnels that are highly trackable with all of your online marketing activities. For example if you buy blog posts and are expecting them to convert readers to buyers, the only way you would be able to track that for sure is by having some means for readers to click through on the post to a product page or whatever your online conversion action is.

If you buy an ad on another network, track the landing page and the exact action that brings in revenue (i.e. a button, a form, etc). Alternatively, you can set a cookie on a user’s browser to track them for a certain time period to see if they come back later to convert.

You asked about the level of detail for tracking. In some cases, it may be very hard to calculate the ROI for a specific task. For example PPC ads on facebook to grow your network or buying blog posts or a contact form on a website. It can be incredibly difficult to track customers who converted by finding you first on Facebook and liking the page, or which reader of a blog post bought something from you or who eventually used your service after contacting you through the web. That’s not to say its impossible however keep in mind that you control the funnel that users follow to transact with you and you should make every attempt to make it easy to track.

The other portions of your marketing efforts you may have to apply different metrics to in order to call them successful. For example you may want to look at traffic levels or engagement as the ROI for your purchased blog posts.

Here is a good post on tracking conversions. Maybe it will inspire you,

Offline and Online Conversions Tracking: Increase Your ROI - Search Engine Watch (#SEW)

Best,

Shawn

Thanks Shawn for all the information. The link you mentioned was also very helpful. I also was able to search for more ROI related articles on searchenginewatch.com.

It seems that I will need to write custom scripts to track and model what I want.

Do people here measure ROI for their content marketing efforts?

Hey Seob,

This is the area that I"m currently looking more into myself. Google analytics is a great tool but there is a learning curve on using it most effectively. And you can definitely use it with Bings and any other ad networks.

You should Google: Google Analytics URL builder. This might be of help to you.

Also realize that email auto responder (such as Aweber) provides analytics tools that can really be put to task.

I don't think there is a one size fits all approach, but through various testing you'll see what approach and what tools work best for your own business.

Yes, you use a marketing analytics tool to create unique tracking links for each marketing channel, and it attributes conversions to their sources and tells you the ROI of each marketing activity.

Here's an example report

Improvely in particular also tracks organic and search traffic sources automatically, rather than just paid ads tagged with special links. PM me if you have any specific questions.

Depends if you run your business like a casino or not...

Easy.

The formula is: (Revenue - Cost) / Cost = ROI

Have fun!

I always use this to calculate my ROI -

Free Online Return on Investment (ROI) Calculator

You must be new here Welcome.

You need to measure ROI all the time with everything you do. It depends on what you're doing exactly, but the point is to find out how cost effective a certain action was.

For example, if you bough a solo ad for $165 that delivered 210 clicks, but you only got 65 subs from those clicks, and you make 1 sale on the sales funnel...then the ROI is calculated into:

30.9% opt in rate (65/210=30.9)
.015% front end conversion (1/65=.015)

In this example, I'd say this was a pretty bad ROI, but you'd have to see how well your back end offers converted. But do you see how to go about measuring ROI?

Yes i measure, but i dont do enough of it. When i market my site, i market using only proven strategies that are known to work well for me. But i have my own "marketing dashboard" that i use to analyze my traffic sources, and i use math to calculate the cost of each new customer that i get, and what i would have to do to make massive amounts of money from my average new customer.