Do It Digital

What is the ROI on Digital Marketing?

The return on investment of implementing an effective digital marketing strategy as a business, corporation, or agency is quite apparent. Not only is it essential to their operations but to their success at large. However, what about a small local business or start-up? Is the return on investment just as high?



The value of digital marketing for both corporations and small businesses alike is much the same. Not only has it changed the way we communicate, both leisurely and professionally, but it’s given businesses large and small an opportunity, a platform if you will, to grow at rapid paces.



No matter how you define growth in terms of digital marketing metrics (i.e. CTA’s, conversion rates, traffic, ROI, sales, engagement, social media following, impressions, etc.), it’s undeniable the importance of having a strategy in place to achieve it.


With that said, what follows will be a discussion surrounding the return on investment from implementing an effective digital marketing strategy as a small business. More specifically, we’ll aim to quantify expectations and further emphasize the benefits of such a strategy.



So, if you’re eager to experience a high return on investment and grow your business to heights you never thought possible, continue reading! If you haven’t yet implemented a digital marketing strategy, the following will implore you to do so…



What is a Digital Marketing Strategy?

A digital marketing strategy involves goal-setting around the promotion of all products and services achievable through digital tools and online channels. As such, the execution of a digital marketing strategy is leveraged on social media, websites, search engines, and blogs, among other digital platforms.



Activities involved in a standard digital marketing strategy include paid media ads, organic content marketing, search engine optimization, and email campaigns, among others.



Through the implementation of the above, digital marketing metrics can be easily tracked, return on investment (ROI) among the most common. While many small businesses fail to measure ROI, it has proven to be a metric that provides the foundation for making informed decisions to further grow your business.


What is Digital Marketing’s Return on Investment?


Simply explained, ROI is the measurement of your business’s profits or losses, calculated easily by the following formula:



[Net Profit/Total Marketing Expenses] x 100


The higher the percentage or ratio, the greater the return on investment. There are, however, several other metrics that a business may consider when assessing its return on investment, both direct and indirect. This largely depends on their goals. The following are the most common metrics businesses measure to assess the success of their digital marketing strategy:


Cost per click, website impressions, total leads, acquisitions, social media followers, average order value, conversation rates, total sales, etc.


Luckily, there’s never been more of an opportunity than now to experience such a high ROI, whether as a large corporation or a small local business. Thanks to the digital marketing landscape, online marketing efforts have never been so effective; that is if you implement the strategies effectively…



Final Thoughts

It’s difficult to quantify what a good return on investment is on digital marketing efforts. As discussed, it depends greatly on what metrics you’re considering to be a return.



In any case, a general ROI ratio that you can expect from effective digital marketing efforts is 5:1; yes, you read that right, that’s 500%! To further illustrate this, email marketing campaigns can generate up to a 4000% ROI; that means for every dollar you spend, you earn back $42!



Of course, these numbers can fluctuate greatly depending on how successful your strategy is and should only be treated as an average benchmark/ goal to strive for.