In today’s digital age, many businesses invest heavily in digital marketing campaigns to reach their target audience and drive sales. However, simply launching a campaign is not enough. It is essential to track and measure the success of your digital marketing campaigns to ensure they are profitable. In this blog post, we will discuss how to measure whether your digital marketing campaigns are actually profitable.
But first, what do we mean by ‘digital marketing’?
Digital marketing encompasses a range of online tactics such as social media marketing, email marketing, search engine optimization, pay-per-click advertising, and more. Each tactic has its own set of metrics that can be used to measure success. In this blog, when we refer to digital marketing, we really just mean pay-per-click advertising campaigns, such as Google Ads and Facebook Ads.
For example, Facebook Ads and Google Ads both have metrics such as impressions, clicks, and conversions. However, the key to measuring the profitability of a campaign is to focus on metrics that directly impact your bottom line.
How do you measure profitability with pay per click campaigns?
The first step in measuring the profitability of your digital marketing campaign is to set clear goals. Are you looking to increase website traffic, generate leads, or boost sales? Once you have identified your goals, you can then choose the metrics that are most relevant to achieving them.
For example, if you are running a Facebook ad campaign to drive sales, the most important metric to track would be the return on ad spend (ROAS). This metric measures the revenue generated from your ad campaign compared to the amount you spent on advertising. A high ROAS indicates that your campaign is profitable, while a low ROAS means that you are not generating enough revenue to cover your advertising costs.
Similarly, if you are running a Google ad campaign to generate leads, the most important metric to track would be the cost per lead (CPL). This metric measures the cost of acquiring a lead through your ad campaign. A low CPL indicates that your campaign is generating leads at an affordable cost, while a high CPL means that you need to optimize your campaign to reduce costs.
Other important metrics to track for digital marketing campaigns include click-through rate (CTR), conversion rate, customer acquisition cost (CAC), and customer lifetime value (CLTV). CTR measures the percentage of people who click on your ad after seeing it, while conversion rate measures the percentage of people who complete a desired action, such as filling out a form or making a purchase. CAC measures the cost of acquiring a new customer, while CLTV measures the value of a customer over their lifetime.
Once you have identified the metrics that matter most to your campaign, it is important to track them regularly and analyze the data to identify trends and opportunities for optimization. Many digital marketing platforms, such as Facebook Ads Manager and Google Ads, offer built-in analytics tools that allow you to track and analyze campaign performance in real-time.
In addition to tracking metrics, it is important to test and optimize your digital marketing campaigns on an ongoing basis. This means experimenting with different ad formats, targeting options, and messaging to see what resonates best with your audience. By testing and optimizing your campaigns, you can improve your ROAS, CPL, CTR, and other key metrics over time.
Educating businesses, as Vancouver’s digital marketing experts
Recently, Legendary Social Media President and Founder Erin Reynel, and Digital Marketing Manager Andres Torres presented to the Better Business Bureau in Vancouver on this topic. You can watch their detailed presentation at the link below.
Measuring the profitability of your digital marketing campaigns is essential for maximizing ROI and achieving your business goals. By focusing on metrics that directly impact your bottom line, regularly tracking and analyzing performance data, and testing and optimizing campaigns on an ongoing basis, you can ensure that your digital marketing campaigns are highly profitable and effective in reaching your target audience.