Digital Marketing Effectiveness: What It is and 5 Ways to Measure It
While the above simplistic definition largely the major cogs in digital marketing, there is a lot more to it, as you’ll soon learn in this here.
Once you learn the intricacies of digital marketing, we’ll then jump into the various metrics that help you measure the effectiveness of your digital marketing efforts.
From developing integrations to strategic support, from creating creative concepts to optimizing results.
What is Digital Marketing?
Digital marketing is the promotion of products and services through digital media. That means any form of marketing that takes place on the internet and off the internet on digital platforms such as mobile phones and display advertising can be considered as digital marketing.
Digital marketing is not just another channel for marketing though. Getting into digital marketing requires the adoption of different marketing approaches and strategies that are geared towards understanding and exploiting the interaction between consumers and digital technologies.
That, in turn, means the traditional marketing approach you’d use in, let’s say TV advertising, cannot be effectively applied in your digital marketing efforts.
To help you get the most out of your digital marketing strategy, here are a few metrics you should always work towards achieving. You can think of these metrics as benchmarks for measuring most, if not any, of your digital marketing success. These metrics also help assure you create brand awareness and increase your sales.
Measuring the Effectiveness of Digital Marketing
Most entrepreneurs think of marketing of superstition, rather than a science. That’s why they constantly battle on whether to spend money on marketing efforts or not. To justify your marketing budget, and turn marketing from superstition into a science, you need ways to measure these efforts.
With the ability to measure marketing campaigns, you have evidence on what works as well as where you need to focus your attention and resources. Here are 5 metrics you can measure in your digital marketing efforts.
Return on Investment
The return on investment (ROI) is perhaps the most important measurement in your digital marketing campaign. It answers the question of whether your digital promotion efforts are working. By measuring ROI, you get to know whether new leads gained through digital marketing lead to new sales.
In the strictness of sense, ROI as a Key Performance Indicator (KPI) helps attribute increased sales to digital marketing efforts. If your ROI indicates there’s a direct correlation of new sales to online marketing efforts, you know your efforts are paying off.
To calculate your digital marketing ROI, divide your total revenue realized from digital marketing and divide it with the total cost of your digital marketing expenditure. The resulting figure should help focus your marketing team and avoid any unnecessary conflicts.
Another KPI you want to track is the conversion rate of your various channels. The conversion rate is an indicator of the percentage of people completing the desired action on a digital advertisement or call to action. For instance, an action in a search engine advertisement would be the user entering their email address in a website form. Another action can be clicking on the purchase button on a website.
Tracking conversion rates help you get a sense of the performance of your marketing campaign. You get to evaluate how effective your digital marketing campaign is in making viewers complete an action.
For instance, your conversion rate tells you how well your display advertisement is working. If you it gets a thousand visits, but only two of the visitors complete the action, you’ll know there’s something wrong with the advertisement. You can then take steps to change various elements to see if the conversion rate goes up.
While most people tend to give a lot of attention to the conversion rate of their websites, it is equally important to monitor and measure the conversion rates of other mediums as well. That is, measuring the conversion rate on your display advertisement, social media campaigns, and email marketing efforts push your digital marketing success significantly further.
It is only by measuring conversion rates across your digital marketing mediums that you are able to tweak each to get the desired result, which then leads to greater sales.
Tracking new sessions on your website is another metric that greatly impacts on your digital marketing campaign. While you can track new sessions using proprietary platforms such as Google Analytics currently, tracking this metric gives you a rough idea of how well your digital asset does in retaining retain customers and attracting new customers.
Google Analytics is free for website owners, and it offers considerable more data apart from new session information. The information to be gained on the Google Analytics dashboard is so robust that websites such as EduBirdie use it for measuring digital marketing metrics that help it deliver the best technological innovations for college students.
Tracking new sessions is an extremely important KPI in your digital marketing campaign because it gives insight into how advertisements on social media, search engines, email, and other platforms are able to attract new customers. It also tracks repeat customers which gives you a sense of how well those advertisements influenced your targeted consumer’s behavior and preferences.
With such insight, you can then restructure your website to fit the behavior and preference of your targeted consumers to increase your sales revenue.
When you measure new sessions, you also gain the ability to determine which website layout maintains a healthy balance of new visitors and returning visitors. Therefore, you are better able to determine what content resonates with both new and returning visitors which greatly improves your digital marketing efforts down the line.
Cost Per Lead and Revenue Per Lead for Every Source
After reading about a lead source that worked for other people, most marketers tend to throw money at it and hope it brings in revenue. While such a brute-force strategy might work, it can backfire leading to losses and even brand damage.
A while back, Facebook was touted as one of the most effective platforms for digital marketers. The sheer traffic numbers generated by Facebook drove most marketers to jump on the Facebook marketing bandwagon, and while most were able to recoup their investment and get some profit, others were not so lucky.
Countless posts from unsatisfied marketers attest to the problem of running with a lead source before estimating its effectiveness in their particular digital marketing campaigns.
To get the most out of your digital lead generation efforts, you’ll need a way of tracking the cost of every lead as well as the resulting revenue from those leads. That means before you jump with both feet into a digital marketing medium, run a few tests to get a feel of its conversion rate.
Essentially, the for every lead you want to maximize its revenue while minimizing its cost. A lead source that generates you $100 sales for every $50 is better than a lead source that brings in $30 in sales for $30, regardless of the traffic it generates.
Bounce rate refers to the percentage of visitors leaving your website before exploring other areas on the site. High bounce rates are obviously bad because they mean visitors are not spending enough time to complete offers on the site. That means even if you’re getting hundreds of visitors every hour, but your bounce rate is high, you’re probably not making any sales.
Bounce rate measurement is extremely important in digital marketing. It lets you know which parts of your website need restructuring to improve user retention. When you have high bounce rates, especially on content-heavy pages of your site, you can work on improving the content to retain more visitors.
A high bounce rate was suggested as one of the factors that negatively affected SEO, so it’s a real concern for your digital marketing needs. There are numerous ways of improving your bounce rate all of which are easy to do.
There are situations where a high bank rate is not bad though. If visitors came to your site and found what they were looking for and left immediately, it is a good thing. You were able to satisfy their needs, and possibly, they will be coming back to your website whenever they have a similar need.
Bringing it Together
Now that you know the core KPIs you should measure in your digital marketing efforts, let’s see how you can bring them together to make a killer digital marketing campaign.
These KPIs are useful for showing and proving the effectiveness of your online marketing campaign. They can do a lot more than that. From the information you’ve gathered from your ROI, Conversion Rate, New Sessions data, Cost and Revenue per lead, and Bounce Rate, you can easily develop a marketing strategy that works for particular circumstances.
Use these KPIs to generate a digital marketing template you can reuse every time you want to promote your products or services. You have reliable data and evidence of what works for your case to justify all your digital marketing decisions and strategies.