How To Measure The ROI Of Digital Advertising

How To Measure The ROI Of Digital Advertising

Digital marketing is not your business’s “magic” marketing bullet unless it is measured, monitored at a regular interval of time, and constantly tweaked. One of the effective ways to measure the effectiveness of these marketing efforts is through calculating Return Of Investment (ROI).

What Is ROI In Digital Marketing?

It is the measure of the profit or loss that you obtain at the end of your digital marketing campaign, based on the amount of spending that you have invested. In simple words, this measurement shows whether you are generating your money’s worth from your marketing campaigns. If you have a positive ROI, it means your advertising campaign is going on the perfect path. If you don’t measure the ROI of your campaigns, you are probably not spending your money wisely. Measuring digital marketing ROI is essential from an improvement point of view.

Measuring Digital Marketing

The intervention of technologies and the world wide web has given digital marketers new frontiers to connect customers online. Nowadays, most of the customers accessing the web on their tablets, laptops, smartphones, digital marketing has become a critical part of every business marketing plan.

In traditional marketing, ROI is measured by increasing revenue and sales of a specific marketing campaign, marketing piece, or strategy generated. In today's digital marketing, you can measure your ROI easily without the need for sophisticated tools.

How To Measure ROI In Digital Marketing?

Measuring ROI is the best way to find out that you are allocating your budget effectively and getting the best out of your market spend. Determining your digital marketing ROI is not easy as it seems. Simply just by looking at the marking campaign, you cannot conclude. How to measure digital marketing ROI will be based on your end goals. Here we have compiled a list of the most common digital marketing metrics used to help you measure ROI:

Conversion Rate: it is the metric used to track return on investment over time. If the end goal of your marketing campaigns is to convert, then conversion metrics will tell how your campaigns are good enough in conversion. This metric will tell you how your campaign is performing and where you can allocate your resources for driving better results and boosting ROI.

Cost Per Lead: if your end goal is to collect and gather new leads for your sales team, then you need to measure how much you are spending for each new lead. This will let you find out what your ROI is for that particular campaign. To calculate cost per lead, divide the total ad by the total number of leads attributed to that particular campaign. If you find that the cost of each lear is more than what you can generate when closing these leads, then you are probably going in the wrong direction.

Lead Close Rate: You need to monitor your lead close rate. You may already be monitored on your own. But there is a chance that this information is not being integrated into the analytics you gather. It also provides you an idea of how effective your marketing campaigns are, which contributes to your ROI. You can also use these campaigns as a benchmark for new digital marketing campaigns.

Cost Per Acquisition: This metric shows you how much it costs on average to get a new customer. To calculate cost per acquisition, divide total marketing spending by the number of sales. Knowing how much it costs to get a new sale helps you better understand your ROI. If your spending is more to obtain a lead than they bring into your company, then it will negatively impact your ROI.

Average Order Value: It is another metric that helps understand your digital marketing ROI. using this metric you can track the average dollar amount that’s spent when a customer goes for an order. To calculate the Average Order Value, divide the total revenue generated by the number of orders. Boosting your Aov is as simple as providing a better user experience.

Customer Lifetime Value: It is an important measurement for understanding your digital marketing ROI. This will tell you what the average cost that customer will spend over their lifetime as a customer.


You can make use of the above-mentioned metrics to measure the ROI of your digital marketing campaigns. Keep in mind that the metrics that you use will depend on factors including company size, business goals, audience, and objectives. Use this blog as a guide to generate the best ROI in digital marketing. It is difficult to do this on your own, hence we suggest you get help from a top digital marketing company.