Last week we busted the infamous digital marketing buzzword or acronym ROI. So, now you have a better idea of ROI and how it can impact on your SME it’s time to start implementing what you’ve learnt. That’s why we created this who, what, when and why post to take you through all the details on how you can measure ROI.
This is the easiest one on the list – you! We understand that majority of SMEs don’t have the resources or the time to hire someone to just do digital marketing or in this case ROI campaign measurement. That’s why we think it’s important to make sure that small business owners have some working knowledge of all the basics. And believe it or not, ROI is actually one of those need-to-know basics. Also, it’s totally possible for a business owner, who has limited digital knowledge, to learn how to measure ROI of campaigns successfully. So let’s get stuck in.
Well, you can probably tell that in this post we’re going to be talking you through how to measure ROI (return on investment). Just to summarise (if you didn’t read our last post), ROI is the money that is left over after you’ve invested in a marketing campaign, and after you’ve received some business from said marketing campaign. Basically it’s the money you’ve made after taking away initial investment costs.
This is slightly trickier, how long after a campaign do you wait until you start measuring the ROI. Is it one week? One month? One year? Well, unfortunately, we cannot give you a solid answer. After all measuring the ROI of a campaign completely depends on the nature of the campaign and your business. For example, if you were launching a Google Adwords campaign you may want to only wait around two weeks before you start measuring ROI. This is because the sort of conversion you get from Google Adwords is almost instant. The user sees your ad, the user clicks on your ad, the user then buys your product and/or contacts you about your services. Whereas something with a longer lead time, like a content marketing campaign to raise brand awareness, you may want to wait around six months before recording anything to do with ROI. This is because creating brand awareness isn’t something that can be instantaneous.
To be honest, we pretty much covered why ROI is important to your SME in our last post. So we think you should just hop over there and have a quick read of that before finishing this post off.
To make things really simple, to measure ROI for a marketing campaign you just have to follow one simple calculation. All you have to do is take your initial investment away from the money you have made from said investment. For instance, if you spend £100 on Google Adwords and the gain £250 worth of business from Google AdWords your ROI would be £150. This is just the basic way of calculating your final profit, however remember that there are actually more ways to calculate ROI depending on what your business goals are.