Finding a Digital ROI

Finding a Digital ROI

The average marketing budget sits around 12-15% of overall company revenue and the executive team must decide how to allocate that budget to accomplish their goals. Whatever that percentage may be MD Marketers is about making sure you maximize your investment. After this short read, you will be sure about how you want to measure the return on investment of your digital marketing? 

According to The CMO Survey, only 23% of senior marketers say they can determine the impact of their digital efforts quantitatively. We’re here to change that. Although we want to make sure this gets fixed immediately, the struggle is understandable: assessing all the various types of organic and paid engagements that happen across multiple platforms can often feel like impossible task.

It’s Not, Follow Me.

Let’s Define Measurable Goals

Determining ROI begins with goals, not metrics. Before you do anything else, it’s essential to clearly define why you’re utilizing the internet in the first place.

Start by outlining broad objectives such as:

  • Boosting your pipeline of qualified leads
  • Increasing sales of products/services
  • Building brand awareness

To measure ROI, it’s necessary to go one step further and connect the necessary tools in order to track your progress towards these goals with quantifiable KPIs such as:

  • Click-throughs to a website landing page
  • Views on a particular piece of content
  • Online purchases of products/services
  • Newsletter/product update sign-ups

What you need here is a set of specific, measurable actions that you want visitors to take.

Assign a Value to Each Action

Now we need to assign a value to each action that you’re measuring.

Begin by gathering any relevant data that connects online action to revenue, such as:

  • The lifetime value of a customer, visitor, newsletter subscriber, etc.
  • The price of products/services promoted on social and typical individual spend
  • The average order size of a website visitor and/or social media referral

What many marketers realize at this point is that the social metrics they currently are paying attention to—likes, comments, etc.—don’t connect well to revenue. Instead, what’s often needed is to track actions such as click-throughs, sign-ups, and visits.

Calculate the Cost of Your Efforts

Combining measurable goals with a value for each action gives you a good foundation, but it’s not all you need. To calculate ROI, you also have to know the costs of your efforts, including time.

Determining this starts with content. Look closely at:

  • The price for producing each piece you post on social
  • Any additional costs associated with promotion and distribution

This is only part of the picture. To have an accurate sense of what you’re spending you need to go further and look at everything else, including labor costs and technology.

Also, be sure to factor in:

  • The cost for all employees who work on social (directly, in support roles, executives, etc.)
  • The price of all hardware and software you utilize (analytics, hosting, production, etc.)
  • The cost of third-party support for your efforts
  • Expenses related to social training, conferences, etc.

Determine the ROI

Finally, after all of that strategizing about goals, collecting data, and scouring of budgets comes the fun part: math!


Determining total social ROI is very easy once you have the numbers: simply calculate your total revenue from your digital efforts (actions x value for those actions) and your total investment (all costs). Then multiply and divide:

(Total Social Revenue – Total Social Costs) x 100

—————————————————————– = digital ROI (in %)

Ready to dive in? Let’s start with no-cost digital marketing evaluation.

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