Understanding the impact that digital has on your business is very important. Determining your RODI (Return On Digital Investment) will help you and your senior management team determine where & how much to invest into digital marketing? The great thing about digital is the ability to measure and test everything you do. When analysing what digital tactics to pursue one of the considerations should be understanding what the return on your digital investment is.
A McKinsey social media survey of about 200 companies revealed that social-media-based marketing is driven more by faith than by evidence. While over 70% of companies believe that digital marketing holds significant potential, more than half struggle to measure its exact impact on sales and profit. So where you do you start and what do you need to take into consideration?
Start with aligning digital goals to business goals
Your goals need to align otherwise there is a disconnect. Your digital marketing should help you reach your overall business goals so the first steps is to these goals align.
Build a roadmap for digital strategy
You don’t start a journey without knowing where you are going and how to get there. Having a digital strategy that maps out the point from A to B will assist your teams to implement the right tactics for you audiences. Only 43% of companies surveyed in Australia have this in place.
Determine your KPI’s
Your KPI’s will determine if you are making progress and act as your barometer throughout your digital journey. It baffles me the amount of companies that don’t set KPI’s for their digital marketing. How do you know what is working and what isn’t without some sort of measure in place.
What metrics do you need to measure
Boards inevitably demand a demonstration of value from their digital investments. There is an abundance of data and metrics available but understand what data is relevant and measure accordingly. Measure what matters, not what’s easy. Think of data as a way to drive business value.
You also need to consider qualative measures or the human factor. Statistics don’t speak for themselves and will often require further interpretation. Measuring the ROI of digital marketing is understanding the complex set of activities and interrelationships among activities resulting in positive ROI.
According to the Fournaise Marketing Group, 9 out of 10 (90%) global marketers are not trained to calculate return on investment (ROI), and 80% struggle with being able to properly demonstrate to their management the business effectiveness of their spending, campaigns and activities.
Understanding the process and how to work with your teams to determine RODI is something that should not be ignored in the digital process. It’s OK to have the pretties (social & content) but without the quantative measures you cannot determine what your RODI is and this impacts everything from budget allocation, internal process, customer engagement levels and business growth.
And you if you need a hand, you start the Digital Conversation with us to help set this up for you. Email me at: firstname.lastname@example.org