Currently, more than 55 percent of small business owners are planning on putting more investment in digital marketing. We can start by assuming at least three-quarters of existing businesses are investing their money in digital marketing within various channels. Most of these businesses have been investing in digital marketing for months, years, or even decades.
If we asked them individually, how many of these business owners would be able to tell you what their marketing ROI is? Do you think it’s closer to 90% or 80%?
Even though the exact numbers may vary depending on which strategy you’re examining, as much as around 40-44% of businesses are unable to measure their digital marketing ROI. And those who can measure their digital marketing ROI mostly do it consistently or effectively.
You can learn more about what is ROI in this article What is digital marketing ROI.
So what makes only a few entrepreneurs know their own digital marketing ROI when it’s such a vital variable for long-term marketing success?
Have no clue about the impact
Oftentimes, some entrepreneurs simply have no clue about the importance to understand the digital marketing ROI. But why is this the case? There are several possibilities. As they don’t understand how valuable ROI is and its significance or even how to use it, they’re not going to put any effort in measuring the metrics.
Don’t know the tools
Some entrepreneurs claim that they don’t or can’t measure ROI because they don’t have the access to the right tools. Indeed, you’ll need to take some steps to track and measure the progress of your digital marketing to be able to calculate your business’s digital marketing ROI.
Even though it sounds overwhelming and costly at the beginning, actually there are plenty of free tools to help business owners determine their marketing effectiveness and boost their campaigns which are considered easy to use. For example, Google Search Console helps entrepreneurs to get an in-depth look at how their website appears in search engines and performs.
ROI as a secondary metric
Some entrepreneurs put ROI not as a primary metric for evaluating marketing campaign success, but as a secondary metric. For example in SEO which is designed to help businesses rank higher in search engines. So it’s reasonable to suggest that the number one goal here is to reach rank one for a target keyword. However, it’s possible to reach rank one and still end up with a negative ROI;
“If you’re spending more money than you’re making in a given strategy, you shouldn’t consider that strategy a success. Similarly, you may end up in a position much lower than rank one while maintaining a very high ROI.”
In our opinion, ROI is considered as one of the most important metric to understand for your digital marketing success. If you can’t determine whether your marketing efforts are working or not, your campaign could actually be hurting your business. And, no matter what, you’ll be missing out on the full potential of your digital marketing strategies. All business owners who utilize digital marketing should monitor their ROI closely and consistently. Otherwise, all your investments and efforts could end up being a waste.