The Best Digital Marketing Strategies, Based on ROI

The dynamic world of digital marketing is an easy place to get lost. Finding your way amid the sea of strategies and mountains of information can be daunting. There is, however, a guiding light: Return on Investment (ROI). Like a compass, ROI helps marketers navigate towards high-value strategies to ensure optimal returns. In this article, we’ll explore various tactics of digital marketing – from SEO to social media – to help you discover the right avenues for your business.   

Before beginning our journey, let's first get a solid understanding of ROI and how it’s calculated.   

 

Understanding and Calculating ROI   

ROI measures the profitability or efficiency of an investment relative to its cost. It’s the “best bang for your buck” metric.   

It is expressed as either a ratio or a percentage and is calculated by dividing the net profit created by an investment by its cost. We’ll show you.  

Say a company invests $3 into a marketing strategy that generates $12 in revenue. The net profit on the activity is $9. The net return ($9) is then divided by the original cost of the investment ($3), which results in an ROI of 3:1 or 300%. In other words, three dollars were earned for every dollar spent on the marketing effort.   

$9.00/$3.00 = 3 * 100 = 300% 

A positive ROI confirms that an investment was profitable; however, mere profits are not enough to know whether it was the best investment. You’re familiar with opportunity costs. Investing in an alternative strategy could perform better. Again, it’s about getting the most value. The biggest bang for your buck.   

Benchmarks for what constitutes a “good” ROI vary by industry and business, but for marketing investments, 5:1 is considered the good baseline average for ROI. An ROI of 10:1 is considered exceptional, and anything below 2:1, though profitable, is generally deemed a poor investment. The investment could have done better elsewhere. Again, these are general benchmarks, and it’s important to consider the unique standards of your industry and business when evaluating ROI.   

 

Digital Marketing Strategies and ROI  

The ROI for digital marketing strategies varies by strategy and depends on additional factors such as goals, target audience, budget, and industry. Still, it’s important to have some realistic expectations about potential ROI before committing those precious advertising dollars to a campaign. Additionally, ongoing monitoring and analysis of ROI throughout a campaign allows for real-time adjustments that optimize its performance.   

The following are a few of the more successful digital marketing strategies and their ROI:   

Email Marketing  

Email marketing delivers informative, transactional, and promotional content to subscribers. Unlike algorithm-driven platforms, it offers a direct like to target audiences. Because subscribers have demonstrated a clear interest, email marketing boasts the highest average ROI among digital strategies: 42:1 or 4,200%. Not bad.   

Search Engine Optimization  

Search Engine Optimization (SEO) is the process of improving a website to boost its ranking and visibility on search engine result pages. Effective SEO can yield a significant ROI as it leads to increased leads, site traffic, and sales. A study by BrightEdge shows that SEO investments can expect an average ROI of 106%.   

Pay-Per-Click  

Pay-per-click (PPC) is a type of paid advertising that places ads on websites or search engine result pages. PPC is among the oldest types of digital marketing and still holds relevance today. It is both cost-effective and easily monitored and helps target specific audiences. On average the ROI for PPC is  200%.  

Social Media Marketing  

Social Media marketing can get confusing. Not only are there multiple social platforms, each with different features appealing to unique demographics, but there are also several overlapping marketing approaches within social media. There is brand marketing, or a business’s own social media presence and activities. Influencer marketing leverages the popularity and credibility of other individuals. Influencer marketing is great for exposure. There is also content marketing, which is the creation and sharing of useful and relevant information. Content marketing has a place on social media, but it can also be part of a broader SEO strategy that includes videos, podcasts, and blogs.   

The variety and overlap in social media marketing make calculating ROI a bit challenging, but the potential returns are significant. A Hubspot survey shows 72% of marketers say social media has helped increase website traffic. Social media can increase brand awareness, foster consumer engagement, and boost sales. Content marketing has an average ROI of 3:1 and helps drive traffic and establish brand authority.   

There are many paths to success in digital marketing. Some will do well using only one approach while others will employ several to strategically reach multiple markets and maximize their return. While search engine optimization (SEO) and email strategies offer the highest ROIs, social media, and paid advertising like pay-per-click hold promise, too, especially as part of a broader, multifaceted strategy.  

Before embarking on any strategy, know your budget and your marketing goals – both short-term and long-term. Knowing the potential ROI ahead of time can help you feel confident in your choices, while regular monitoring of your progress will help you know when a course correction is necessary. Setbacks can happen, but remember that they can hold opportunities, so go forward with optimism. It’s going to be an exciting journey!