Measuring ROI — Digital Advertising

Measuring ROI — Digital Advertising

March 02, 2018 | Marketing Blogs

For decades, most of the marketers have been hiding behind the insinuated acceptance that “half of the marketing we do is effective, we just don’t know which half.” This challenge applies to all facets of marketing, be it social, digital, creative, media, etc. According to a survey by Deloitte, 71 percent of advertising campaigns fail to meet expectations and more than 90 percent of digital marketers have admitted that their advertising was a sheer waste of money.

Gone are the times when a campaign could be measured by the number of visitors alone. Linking digital content with revenue is one of the biggest hurdles marketers face while determining the ROI of digital efforts. Also, aligning KPIs with overall business goals, collecting the right data and determining the right KPIs are some of the key challenges faced by digital marketers while mapping ROI.

The most effective way to measure digital advertising ROI is to track metrics that tie directly to profit and revenue. Using the soft metrics mentioned below, brands can measure the ROI for programmatic advertising, mobile video ads and native advertising.

Programmatic Advertising: Programmatic advertising metrics must be measured frequently due to their flexibility and versatility. Managers need to focus on areas such as:

  • Website Traffic: As and when the brand becomes popular, one should see an increase in traffic resulting from people who come directly to the website by typing in the URL as well as following the ad.
  • Reputation and Recognition: Managers can search for their brand name on social media and keep track of the number of likes. Brand recognition should increase as the programmatic ads run longer.

Mobile Video Ads: While evaluating the success of mobile video ads, managers can consider the following metrics.

  • Impact on Revenue: Did the brand ad lead to an increase in sales? Managers should look at the first-touch or multi-touch attribution that was generated by the video for a look at the ROI, but for a larger picture, one should consider the amount of traffic generated by the campaign and compare it to the sales numbers — including the numbers before and after the campaign was launched.
  • Brand Awareness: Brand awareness must be measured by looking at the direct traffic numbers, the number of consumers or visitors who searched for brand video by its name/hashtag, the number of clicks from referrals, the number of social media shares and so on.
  • Accessibility: Managers should track the placement of the ads and test them to make sure they are viewable across all devices and not hidden on the page. This ensures that people have access to brand ads.
  • Mindshare: While there is no way of measuring how often people discuss the brand with friends over coffee, one can get a good idea of how often people are talking about it by looking at the comments and shares on mobile videos.

Native Advertising: Measuring the ROI of native advertising could pose a challenge for many brands. It is measured primarily by click-throughs, which is an important factor to consider, but other measurements are also critical in understanding the full picture of its performance.

  • Customer Acquisition: This can be calculated by dividing the number of click-throughs by the number of people who submitted the contact information.
  • Brand Recognition: Are more people able to recognize the brand because of native advertising? To determine this, one needs to look at the website analytics to find the number of hits.
  • Reputation: The information presented in the native ad should help to develop the company’s image as a trusted expert, leading to a greater number of people turning to the brand’s website for advice.

Tracking the right social media KPIs can help marketers achieve significant savings as well. For example, British Telecom (BT) has managed to save £2 million annually by reaching approximately 600,000 contacts per year through social media instead of more expensive direct marketing channels. In the process, BT tracked KPIs such as the number of unique customers, resolution rates and the operational cost per channel, thus differentiating the social media channels from others.  

Moreover, marketing needs to be innovative in measuring ROI. For example, inContact ran an experiment with 50 percent of its sales representatives for three months; the ones that had been trained in social selling had a sales pipeline 160 percent higher than that of their colleagues, and by the close of year had achieved 215 percent more revenue. Thus, accurate measurement of digital advertisement ROI can not only justify the digital investments, they can also foster efficiency and transparency.


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