Calculating ROI
ROI is a measure of the efficiency of an investment. It is calculated as, ROI = (income/cost of investment) x 100. For example, an investment with a profit of $400 and a cost of $400 would have an ROI of 100%, which means that for every dollar invested, a dollar earned in return. Return on investment should be considered along with other factors such as risk and time horizon when evaluating the success of an investment.
Looking for?
To begin with, companies and their designated marketers must define the objectives of the marketing activity, either by exclusively involving industry players, as is often the case with B2B companies, or by targeting the retail consumer directly.
For example, according to sequence of words, the average landing conversion rate is 2.58%, while the top 25% of performers achieve a conversion rate of 5.31%. This finding from the marketing giant reveals that conversion rates, as well as the strategy required, vary by company. Therefore, in the absence of a one-size-fits-all approach, marketers and their clients must set a campaign goal, which once established, makes it easier to choose the right platform for the next step.
Some of the most common goals of campaigns are to spread brand awareness among existing or new customers, increase brand visibility to capture the attention of target audiences, provide a personalized consumer experience, and collect consumer behavior metrics to optimize marketing efforts.
Selection of platforms
If the target audience is directly industry players, then no other platform has a better ROI than LinkedIn, as it is one of the most organized places for professional networking. Although the platform’s cost-per-click is higher, compared to other platforms, B2B companies can leverage LinkedIn for a 200-500% ROI, effectively reaching key demographics.
Similarly, Bing Ads, with a proven track record of effectively engaging niche organizations and demographics, has an impressive 200-300% ROI, and unlike LinkedIn, the platform is much more profitable and has less competition for your campaign.
On the other hand, Meta (Facebook, Instagram) Ads and Google Ads have an ROI of 100-300% and 200-400% respectively. Campaigns on both platforms generate lucrative returns for both B2B and B2C platforms as marketing pushes are optimized with effective keywords, catchy ad copy, enhanced landing pages, and more. Also, the appeal of Meta and Google lies in the fact that they allowed different demographics to be targeted under one roof, although different groups may need to be uniquely engaged.
Another method of consumer engagement would be content marketing, which has an ROI of around 100-200%. What differentiates content marketing from other forms of advertising is that it is more detail-oriented, thus providing more information about the product or service.
As SEO-optimized content continues to build traction over time, the long-term benefits of content marketing are brand awareness, brand loyalty, and organic traffic, to name a few. Although calculating ROI for content marketing is not straightforward compared to other advertising options, businesses can use metrics such as website traffic, lead generation, and resulting conversions to measure returns.
Strategies that must be adopted by B2B companies
Lead generation: For B2B companies, lead generation is one of the most important strategies. Through SEM (Search Engine Marketing), display advertising and content marketing, B2B companies can generate high-quality leads by targeting specific industries, jobs or companies. Interestingly, according to HubSpot Businesses that blog generate over 67% more leads.
Profitable advertising: By choosing cost-effective and measurable advertising options, businesses can opt for avenues such as pay-per-click or qualified leads, where the cost is incurred in the results. These marketing methods not only directly indicate ROI, but also help set future marketing budgets.
Conversion Optimization: Businesses can study analytics on their B2B operations to analyze data on their click-through rates (CTRs), conversion rates, and cost-per-acquisition (CPA). This helps you make data-driven decisions to improve your ROI.
Strategies to adopt D2C strategies
Direct sales: Social media marketing, influencer marketing, affiliate marketing, etc. can be leveraged to target specific target groups with defined tastes and demographics while keeping the generation gap in mind. For example, if the target age group is between 40 and 50, LinkedIn and Facebook may be the most suitable platforms. Whereas if the target age group is 20-30 years old, Snapchat and Instagram may be more suitable. By selecting the right platform for the target age group, businesses can effectively communicate with their audience. To calculate direct sales ROI, companies should focus on metrics such as ROAS (return on advertising investment) and CAC (customer acquisition cost).
Customer engagement and retention: Speaking of the human touch, marketing options like email marketing campaigns, loyalty programs, and retargeting ads can add value to the consumer on a personal level and drive a company’s customer lifetime value (CLV) and repeat purchases.
A/B testing and iterative optimization: To get the best campaign result, companies can perform A/B testing on ad creatives, landing pages, and promotional offers to optimize campaigns, thus further increasing ROI.
Ultimately, before investing in digital marketing business, you need to consider the campaign objective, the best platforms and strategies, and the long-term brand goals.
The author, Mohan Gohade, is Head-Paid Marketing, SRV Media
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Updated: 28 June 2023, 14:01 IST
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