Are businesses actually ready to care about digital marketing ROI?Being able to easily calculate digital marketing ROI through analytics is as much a curse as it is a blessing. Pinpoint targeting, micro budget management, and advanced tracking all contributed to digital marketing’s meteoric rise in popularity (years ago). It empowered small businesses with data driven results, but over time these channels have become increasingly crowded and more difficult to perform in.

Since then the conversation surrounding ROI has ended up being the cart put before the horse in most cases.

Let’s look at how a business can prepare and avoid blindly jumping into digital marketing with misaligned expectations.

The digital marketing ROI “gold rush.”

At first, digital marketing was a cheat code for businesses who got in early as each new platform launched within search, social, and display networks. Businesses were seeing ten times the return or more on ad spend costs and the detailed tracking data was there to prove it.

What a time to be alive.

Then, all of a sudden, it got harder. More businesses were jumping into the Search Engine Optimization (SEO), Search Engine Marketing (SEM), and social media advertising channels. In the blink of an eye, it became crowded again. The cheat code wasn’t a sure-fire win anymore.

Digital marketing channels continue to be effective, but they are no longer as easy as they once were to effortlessly generate ROI on dollars in. There are many more players in the system. Millions of established websites have been optimized for local, national and international search terms. Search and social advertising systems are crowded with businesses paying to push their ads through, all competing on the same click bids. Web users are conditioned to ignore and, in some cases, actually block ads that appear on websites.

Simply participating in digital marketing channels is no longer an edge. Yet so many believe that’s still how it works. A lot of money is lost and businesses hurt by this fallacy.

Business owners and marketing managers need to have an understanding of whether or not the business is even prepared to care about digital marketing ROI as part of the conversation yet.

Is the business ready to play in a crowded space?

How to be prepared for digital marketing ROI.

There is a common misunderstanding that simply getting more traffic to a website will result in more leads or sales conversions. While not entirely false, it is mostly a pipe dream.

Digital marketing is not as simple as paying for a click or ranking first page on search engines for a keyword. Getting someone “through the door” is only the first step of the equation. There is still a lot of work to do after earning the click in order to motivate a user to take action.

This has led to a lot of business owners and marketing managers being unprepared for the traffic they are generating through these channels and ultimately being disappointed with the results and ROI.

So how can a business be more prepared for digital marketing ROI to matter to them?

Present a professional and strong brand presence.

Having an unprepared brand presence and web presentation contributes to low conversion rates. Conversions (calls, emails, forms, purchases) are what are used to calculate ROI within digital marketing channels. Presenting a subpar experience after a user clicks to visit your website is an immediate turn off for users.

Any sale, no matter if in product or service industries, relies on trust and confidence. Trust and confidence are built through the quality of presentation and reputation of the business in the market.

This is collectively achieved through how a business looks (branding), sounds (voice & tone), fulfills its promise (messaging & product quality), and presents itself (store, website & ads) collectively. If any of these items is misaligned or neglected, it instills a sense of disorganization and lack of seriousness to the viewer. Confidence is eroded; trust isn’t earned.

A professional presentation (website, content, ads) with strong messaging earns the users’ attention and immediately builds trust after they click a link or ad. This improves the likelihood of generating a sales opportunity from the click.

Communicate a clear differentiator in the market.

All digital marketing channels are crowded. Having a differentiated position in the market helps in two ways. First, it can improve click through rate (CTR) by earning clicks through a unique and interesting value proposition. Second, it can drastically improve conversion rates as the value and position in the market prove to customers that the business’ product or service is the highest value provider.

Sending a user to a basic service or product page offers no urgency to convert. This results in high traffic growth gains and stagnant to low conversion rates. Low conversions appear like a failure of the digital marketing campaign, but may actually be a lack of support from the business side.

Why should a user contact or purchase from a business? Is the business the fastest, least expensive, or highest quality? What reason is provided to the user to believe any of these things?

This may be the biggest factor in ROI. If the product or service itself is not convincing enough to interest someone who’s visited the site through a paid click or optimized keyword, why should any ROI be expected from this?

Simply put, the product or service needs to be proven and high quality.

Motivate the user to convert now.

Even a well designed brand and website along with proven product or service quality can leave some users on the fence if they are still in their research phase (versus decision making phase). To combat this, a sense of urgency should be implied to motivate the user to move towards a conversion and become a lead/sale. There are few helpful ways to do this that can each benefit the user.

The easiest way to motivate a user is to offer a limited time promotion. This builds a sense of urgency through the thought of missing out on the opportunity of a discount or bonus offer.

Another way to motivate a user is to remind them of seasonality. By leaning into the reality of the necessity of the product or service in the near future, it will add to a sense of preparedness gained by taking action ahead of the actual need.

For some businesses a free sample is a great way to motivate someone to still give you their information even if they aren’t ready to buy yet. It creates an additional touch point that proves value by rewarding them with something tangible to evaluate.

Limited availability can go a long way in motivating a user to convert. This creates a sense of exclusivity by being one of few or an early adopter of something new. Not only is this motivation, but includes a bit of an ego boost for the user as well.

Each of these tactics can help contribute to boosting the conversion rate for a campaign. Conversion rate is the most important metric to achieve a provable ROI.

Digital marketing is not a shortcut to ROI.

Too many businesses have given up on digital marketing as a growth channel because they’ve put the cart before the horse. Without a strong brand, solid product or service, and compelling ask, digital marketing is simplified down to a click generation tactic.

Advanced campaign tracking and analytics should still be a priority, but the expectation that digital marketing activity should immediately generate ROI, without these other factors taken into consideration, is a recipe for failure.

If a website’s organic rankings are high, paid search and social ads are driving traffic, and the business isn’t seeing a recognizable ROI on that traffic, it’s time to consider if aspects of conversion optimization above need to be readdressed.

Is it worth paying to send traffic to this brand / website / product or service page?

Is it worth spending $20,000+ a year on search optimization and ad campaigns that don’t convert? The answer is no. Those funds can be used to build a better foundation that sets the business apart in crowded digital marketing channels and motivates users to convert once they’ve earned or paid for their click.

Take a step back, regroup, and THEN relaunch.

You can also check out our “Is performance marketing dead?” article that touches on a similar topic.