A big part of running a business is making investments. While the biggest investment probably comes upfront when you first get started, you’ll continue to spend money for as long as you keep operating. In many ways, the businesses that are able to rise above the competition in their markets are those that spend most effectively.
With that in mind, using monthly Return on Investment (ROI) reports is an important way to track how the money you spend is performing in the real world. Are your marketing endeavors paying off well enough to justify the money they require? You can answer this question and many more by paying close attention to ROI reports month after month.
Whether you already look at these reports and want to make sure you are learning from them or you simply don’t use this type of reporting yet, this article will help you make progress. Put some of the ideas and tips below into action, and you’ll have a better foundation on which to make smart decisions.
Created or Received
One possibility is that the report was produced in-house by a member of your organization. If you do all of your marketing activities, this will likely be the case – there will be collaboration on ROI reporting to highlight how things are going and where money is being spent.
Alternatively, and perhaps more likely, you’ll get your ROI reports from your chosen digital marketing agency. When you hire an agency to work on various digital marketing initiatives, one of the things that the agency should provide is a monthly ROI report that touches on the performance of your marketing endeavors in various areas.
The need to receive this kind of reporting is obvious. If you are sending the marketing agency a check each month for their services, you need to see some cold, hard data regarding the results they’ve achieved. If the results aren’t there, you certainly won’t want to continue spending with that agency. And it’s never good enough to assume that they are getting the job done. Only a consistent flow of reports, month after month, will allow you to evaluate their overall performance.
So, what should you learn from the reports you are being provided? That’s what we will cover in the rest of this article.
Start with Traffic
It’s a safe bet that one of your primary goals when working with a digital marketing agency is to see the traffic to your website grow over time. This growth may happen in part because of paid ads you are running – more on that later – but the primary driver of traffic growth will hopefully be in the organic category. Ongoing search engine optimization efforts will ideally lead to a boost in organic traffic, which will make it easier for you to collect leads and hopefully make more sales.
So, when reviewing your reports, traffic numbers are a core sign to monitor and see if things are moving in the right direction. Of course, you shouldn’t expect your digital marketing agency to deliver shocking growth overnight, as the SEO world is crowded and competitive. A good rule of thumb is the 10% growth mark on a monthly basis – if you secured 10% more traffic this month compared to last month, your site is on the right trajectory. Even more growth would be great, of course, but consistently maintaining something around 10% would allow you to have a much busier site in the near future.
When you monitor these numbers, you’ll have a foundation on which to have informative discussions with your digital marketing agency. Where do they see further opportunities for growth? How much growth do they think is attainable given market conditions and the competition? Also, if you see traffic trending down instead of up, you can have some honest conversations about the future of this partnership and how they plan to turn things around.
One other important note on traffic growth is that you’ll want to give your digital marketing agency some time to gain traction before evaluating their performance in this category. If you just hired the agency within the last couple of months, any organic SEO efforts won’t have had enough time to start paying off just yet. You’ll need to be a few months into your partnership, if not a year, before you can really tell if the SEO game plan is working.
How Are Paid Ads Performing?
Unlike search engine optimization, paid ads are an area where you can expect to see quick results. As soon as you start paying for ads to be placed in various locations around the web, you should have at least some degree of return on that investment. Monitoring the performance of your paid ads on a report each month is crucial because continuing to run PPC campaigns without results can get very expensive in a hurry.
There are a few important metrics that you can monitor and should ask for in your reports to make sure your PPC efforts are working out properly. These include:
- Click-through rate: This is the rate at which people click on your ad compared to how many people see it. For example, if your ad is displayed 1,000 times, and 10 people click on it, that would be a CTR of 1%. A 1% CTR on paid ads would be a strong performance, as you will often see results down around 0.25%. If your ads have a CTR as low as 0.1% or even 0%, you’ll need to ask about ways to improve the quality of those ads.
- Cost-per-click: This metric measures how much you are paying, on average, for a click on one of your ads. The cost per click will vary wildly based on your market. In some market niches, a click will cost well under $1.00, while other markets will dictate CPCs of $50 or beyond. It all depends on how much that click is worth to the companies that are placing the ads.
- Conversion rate: You can monitor your conversion rate to see how many people who click on your ads take a desired action. For example, if your ads are clicked on 100 times in a month, and the goal of the ad is to collect email signups, and 5 people sign up for your email list, the conversion rate is 5%.
You can compare these metrics to market averages (when available), and track them over time. If your digital marketing agency is doing a good job with your campaigns, they will be able to move these metrics in a positive direction as the ads are continually refined and improved.
Content Creation Results
Content creation is typically the most expensive and time-consuming part of the digital marketing process. It’s likely that your digital marketing agency is spending a considerable amount of time creating new content, or they are using some of your budget to outsource the content creation to a freelancer. Either way, it’s important to ensure that the content being created is paying off properly.
The reports you’ll want to see regarding content creation will depend on the types of content that are being produced. For instance, if it is written content for your blog, you can use traffic numbers to those pages to see how blog traffic may be improving over time. You could also use search ranking reports to check if any of these blogs are landing on the first page of organic results. Written content marketing works for many businesses, but you can’t assume that it will work correctly for your business – you need to monitor it through reports to confirm.
Video content works in much the same way, although there will be different metrics to review. If your digital marketing agency is developing your YouTube channel, you can track metrics such as total subscriber count, monthly views, and more to see how things are going. You should also check engagement numbers to see how long people tend to stay on your videos. Even if you have a relatively small channel with modest view totals, producing that content could still be worth it if viewers are strongly engaged and building trust with your brand along the way.
Effective Email Marketing
Check this text for grammar and spelling mistakes: Finally, you can’t forget to track the performance of your email marketing efforts. Email marketing is a great way to connect with your audience, but it requires knowledge and expertise to do it effectively. If your digital marketing agency is struggling to reach your customers and potential customers via email, consider working with specialists in this area.
Some of the metrics to watch over time with regard to email marketing include open rates, click-through rates, and conversions. On a fundamental level, if your emails aren’t being opened very frequently, the whole system isn’t working – you aren’t getting quality leads to sign up for your list, and the subject lines used in the emails might not be interesting enough to draw attention. Once the open rate reaches an acceptable level (e.g., over 20%), focus on improving click-through and conversion rates.
Outside of the performance of the emails themselves, it’s also good to think about how your email list is growing (or shrinking) over time. Make sure your email subscriber count is included in your reporting so you can see if efforts to draw more subscribers are paying off. Ideally, you’ll like to at least see modest growth month over month, with the number of subscribers joining outpacing the number of people who decide to unsubscribe and leave the list.
While most businesses produce multiple reports each month, ROI reports should be prioritized for their importance in assessing the effectiveness of marketing efforts. This data will tell you a lot about how your money is working for you in the market, and what changes might be necessary to get better results. Thank you for visiting and good luck!
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