Generating Return on Investment (ROI) in Digital

At the end of the day, every business wants to see their marketing spend deliver a tangible ROI. For this to happen, a couple of things need to be defined.

  1. Define the objective. What is the objective of spending money on digital marketing?
  2. Define return on investment. What is being measured to determine return?
  3. Define the time frame. Over what period of time should the investment deliver a return?


Define the Objective

Every business uses digital marketing for a different purpose depending on where in their development/sales cycles they find themselves. A 6-month old startup with an app will have a different objective than a 2-year old startup offering a new feature on its existing app. Getting specific with the objective will help guide strategy. The 2-year old startup may have the objective of persuading existing users to purchase the new feature while the 6-month old startup may have the objective of getting as many downloads as possible in a given market amongst a specific demographic. Just like a new hotel will have different online objectives than a 10-year old hotel. Thus knowing why you want to spend money on digital marketing is essential.

Define Return on Investment

Based on the objective, how will you determine whether the investment has yielded a return? Is it through number of app downloads, revenue generated, email open rate, Facebook likes or another metric? Defining the metrics to measure will help you determine whether you are being successful in your digital marketing efforts.

Define the Time Frame

Expectations over 3 months are vastly different than those over 6 or 12 months. Defining the time frame allows you to properly create a strategy and allocate budget.


Suppose you are a hotel looking to increase direct bookings on your website during the 2 months before summer. First you would define the objective: increase traffic to the website in order to generate more direct bookings for the summer during the 2 months before summer. Then you would define the return on investment: to measure the success of this campaign we will be tracking the number of sessions on the website, the bounce rate, the time on site, the number of clicks to the booking engine, the number of direct bookings, the number of indirect bookings and the total revenue generated from digital marketing efforts during the period. Lastly, you define the time frame: 2 months.

By the end of the campaign period you will be able to determine whether the campaign has been a success or not. You can ask yourself a few questions to better assess the data. Did all metrics perform as predicted? Did this result in generating revenue above the amount of money spent on digital marketing during the period? How much more or less? Why? How can this be improved for the next campaign?

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