Return on investment in digital marketing is a hot topic and isn’t one that is easily answered. At least not at first glance.
A very simplistic view is what went in and what went out.
i.e. We spent $500k on marketing. What did we get?
The output or impact then has to be linked to the companies objectives. Which should have a dollar amount assigned to it.
For example, we needed to grow the awareness of our brand, to achieve the 15% growth. And 15% growth is worth $1m to us.
So if digital marketing spent delivered the $1m that return on investment has been two-fold. Twice what was invested.
That is a strategic model. Other models can be through to direct sales, growth in subscribers. All equate back to revenue at some point but it is worth taking the time to map that out.
Time scale is also important because changes can be enduring. It might be that the digital marketing investment in year one helped deliver 15% growth in year one, then 5% growth in year two and 3% in year three.
A good baseline is to consider a four-year timeframe for payback.