How to calculate your ROI in the digital world

We are finishing 2020 and it is Time to take stock of the actions carried out this year to propose budgets, campaigns and actions for next year. For this reason, at Novicell we give a webinar on the topic of ROI in digital marketing, which can be viewed in its entirety in this link with the recording of the webinar. We give you a summary below.

ROI, an easy formula but not a magic one

Although the ROI formula is simple to calculate, it is true that there are no magic formulas but that we must take into account the casuistics and idiosyncrasy of each company, of each service or of each sector. It would be ideal if it were so easy to calculate, applying the formula and that's it.

Las complexities of a project they play a key role here: What we consider investment, this investment that we have made what is attributable to the action we want to study. We will have to apply the resourcefulness in each of our projects and businesses.

What is Digital Marketing ROI?

Digital marketing ROI is the measure of benefit or loss that you generate with your digital initiatives based on the amount of money you've invested. That is, how we use ROI for our digital marketing initiatives. We focus on benefits, not revenue.

Challenges or difficulties we encounter when calculating ROI

Difficulties in obtaining data

For example, how to know if income comes from a specific campaign. Thanks to analytics tools, we have access to information, but we have to track it correctly. What income and investment are attributed to the action we want to analyze.

Difficulties in obtaining the direct monetary relationship

Another challenge we may face is how to relate investment to profit.

How to use ROI

When should you calculate the ROI? Surely you need to calculate it if you're asking yourself questions like:

• Should I (or shouldn't I) make this investment?
• Does this investment make a profit or loss for me?
• Which of the actions I want to perform is the most profitable?

ROI, beyond the formula, involves the use of creativity, in order to do so Translate the complex into something simple. In fact, it is essential not to dwell on the details and to have a complete vision in order to be able to make agile decisions in environments such as digital marketing.

Therefore, it is important to decide your degree of precision when making calculations: Perhaps a high degree of precision is not necessary when making decisions.

And now, what do I do with the ROI?

When it comes to analyzing, it is advisable to see all the Journey What do users do and use them attribution models to be able to analyze better. Each channel plays a different role in the Customer Journey and analyze the set is important for calculating ROI.

Let's give the example of Adidas, who took into account the ROI of their investments in ads, and they increased their budget because the data was positive. However, if a global vision of the business had not been taken into account, too much would have been invested in advertisements and this could have been detrimental to the brand image.

ROI is an indicator, and as with other indicators, the objective of calculating them is to make better decisions and see the data with a global business vision.

Watch the Webinar

How can we help you?

If you need more information, do not hesitate to contact us.