You don’t need to be a CFO to rely on a Return On Investment report. You may be like some of my clients, concerned about a limited budget and the dizzying landscape of a relatively new sector, digital marketing. If so, you are in the right place. I am going to walk you through how I put together ROI reports, along with the thinking that supports various decisions.
We all remember how keen we may have been to avoid high school maths. But we need to rethink our attitude towards ROI reports. Yes, you are going to be dealing with numbers, but fun ones. They are not an afterthought, and they surely shouldn’t be optional. They are an essential part of delivering results.
If you take the time to know how well your money is performing for you, you will waste less and achieve more in the long run. These reports make you lean as you reexamine priorities and cut out fruitless tactics. It’s all about sticking to a plan, being patient and readjusting strategically where changes count the most.
NOTE! Before any ROI report, it is important to have set up either an SEO or Social Media Marketing Plan.
If you are confused on how exactly to go about making a detailed SEO plan, be sure to read, ‘How to write an SEO plan’ before continuing. Most metrics you will want to track in your ROI report would have been laid out in your plan.
And for those who know a plan will quickly fall apart without accountability, time to talk ROI.
THE GOAL OF ROI REPORTS
Remember that SEO and Social Media Marketing are a young art form, and though your clients won’t want to hear that, it is still a fact. The word ‘patience’ can’t be repeated enough. As part of a social phenomenon, initiatives will need time to stick.
Gone are the days of, ‘Mad Men.’
People aren’t so easily convinced by your first effort to impress them. Still, we must be held accountable, ROI reports keep us structurally aligned, consistent and financially disciplined.
Drive down cost
Justify resource allocation
Expose gaps in methodology
Eliminate weak points in strategy
Force you to be more in tune with your customer.
WHAT EXACTLY SHOULD AN ROI REPORT INCLUDE?
Your report should have some of these:
- Objectives – What you initially set out to achieve
- Key Performance Indicator Analysis – Metrics specific to your goal
- Overall Metrics Review (Per Platform) – Typically features charts specific to campaign period
- Data Spreadsheet – Current Stats viewed together
- Data Analysis – Compare ‘Year to Year’ or ‘Month to Month’
- Marketing Impact – Consumer behaviors influenced by campaign and how campaign efforts affected other marketing initiatives (if relevant)
- Performance Summary – A written update on the performance of the campaign concerning set objectives – Highlight successes and point out opportunities – Include figures showing changes related to targets (e.g., Sales, Conversions, Followers, Web traffic, Backlinks, etc.)
- Adjustments and Forecasting
WHAT SHOULD YOU ALWAYS KEEP IN MIND?
Everything you do on social media and SEO ought to fit snugly somewhere amidst an interconnected series of marketing initiatives. Your effective ROI report should take the big picture into account.
Marketing campaigns, for the modern day business, include multiple channels and synergized objectives. But you don’t measure social media success with the same ruler of your blog performance or your traditional media conversion rates. Sure they all end up relating to your business but is vital to understand the uniqueness of standards pertaining to their respective varying platforms.
It is best to create reports relevant to the primary objective of the marketing plan and specific to the primary concern of the month. Again, reports tracking conversion rates will require more sensitivity towards specific metrics as opposed to reports focused on brand awareness. You will adjust Cost Per Click bids differently to the way you would Cost Per Impression bids, depending on your goals. And this should affect how you organize and present your reports.
What are some general objectives your ROI report may address?
- SEO Rankings
- Social Media
These I like to separate into two categories, the secondary objectives, and the primary objectives.
- Secondary objectives:
These include Impressions, Clicks, Likes, Fans, ReTweets, Followers, Views, Shares and Comments. When these stats are up, you feel good. You want to show them off, and rightfully so. But they don’t do much more than gauge public awareness or engagement. The fun comes when you are skilled at translating these secondary goals into drivers of primary objectives.
- Primary Objectives:
These Include Conversions, Traffic, Social Mentions, Problems resolved, Lowered response time, Contest participation, Leads, and Sales.
You should ready to answer, ‘how much did you spend to boost these attributes?’ They closely affect your bottom line. ‘How did this boost affect other areas of your overall marketing campaign?’ There are no isolated incidents in marketing.
HOW DO YOU MAKE SENSE OF METRICS?
If you are going to create a compelling ROI report, you need to speak the lingo of the metrics involved. Learn the hidden narrative they are dying to convey. How do you ask?
Start with a thorough understanding of what each metric measures. You may help yourself by studying precisely what shifts to make when you notice certain trends. But NOTE! You tend to be able to strategize around metrics much easier when you relate them to other metrics. Otherwise, you are just staring at individual numbers without a story behind them. Let us take a Facebook Ad campaign for example.
Let’s say you are just starting out. You just want to get your name out there. What is your campaign reach (number of people potentially exposed to your ad) and what does your page engagement look like? Have you considered an engagement to reach ratio? Plenty of eyeballs and not enough clicks may reveal the need for adjustments to the copy of your advertisement, or perhaps the timing of your post or you misjudged your target audience?
Is your goal is to boost the number of likes on your page? Have you considered your frequency (amount of times the average user within your campaign reach saw your Ad)? Have you thought of how this parameter tends to affect your engagement and conversions? You may need to narrow your focus (e.g., spend more on users affiliated with niche facebook groups).
And now, let’s say you are looking to generate leads or gain some traffic to your website. You opt for a Cost Per Click campaign. Have you examined the Click Through Rate
in contrast to your Total Spent? It isn’t enough that your reach is massive. Take into consideration that after a while, Facebook may opt to prioritize other Ads over yours if your campaign is not performing. Is it time to pause the campaign for a fix-up or shift to an impression based strategy?
Here are other Facebook metrics you may want to compare, depending on your goal: Social Impressions vs. Reach; Click Through Rate vs. Action; Social CTR vs. Cost Per Click; or Page Likes vs. CPC/CPM. Oh and umm, never forget your Total Spent! As you become more comfortable with these reports, your expenses should start decreasing while you achieve the same results.
Still, I have to admit. No manual will thoroughly guide through what exact parameters you ought to move in combination to drive our goal. But are plenty of patterns, and many resources you may refer to for clarification. Don’t let the numbers scare you, have productive fun with them, find correlations, create strategies and drive results. Otherwise, why bother making ROI reports?
KEY CALCULATIONS TO CONSIDER
ROI = (Revenue – Cost of Goods Sold) / (Social Investment) x 100
Growth rates = (Present Value – Past Value) / (Present Value) x 100
(over specific period of time: by week, month, quarter or year?)
Conversion Rates = Goal Completions / Visits x 100
WHICH TOOLS DO I RECOMMEND ABOVE ALL ELSE TO DIGITAL MARKETERS INTERESTED IN MONITORING METRICS?
AHREFS is your friend. AHREFS should be your best friend. Nah just kidding. AHREFS is an exceptional product but so is WOORANK. Depending on your budget and focus, you may want to opt for differing tools. With enough research, you will come across free software for running any analysis you may want to run for your ROI reports.
With that being said, here are the tools that allowed me to generate reports with the most ease:
For Backlinks and overall SEO performance: AHREFS
For Social Media Management: HOOTSUITE
Link Performance: BITLY
Facebook and Twitter: FACEBOOK AND TWITTER INSIGHTS
Search Engine advertising: GOOGLE ADSENSE
ANOTHER CONSIDERATION FOR YOUR ROI REPORT
During your analysis, consider the performance of a key competitor!
This is especially the case for Social Media based reports as it is SEO reports. Sometimes your pages or campaigns won’t respond to your investments the way you expect them to. And often times it won’t be your fault.
By keeping tabs on a competitor who posts similar content to you, you can get a more honest sense of your performance.
Today you can quickly discover which keywords a competitor targets, by using the Mozbar Google chrome extension. You may track where they are receiving links. You may make a note of their jumps in traffic. If your worry is engagement, you may quickly gauge how many shares the last “how to-” article performed on your competitor’s site. And by checking out their social media platforms, you may be able to reverse engineer a competitor’s strategy.
Think about it. There is a trending hashtag on Twitter. You spend a healthy chunk of your budget trying to gain traction through the buzz of this hashtag. Put perhaps your efforts do not earn you the return you expected. Yep! It’s time to head back to the drawing board, but be also be sure to make a stop at your competitor’s twitter page. Often the difference between becoming a part of a conversation and not is a tiny detail.
The point is, regardless of which platform you primarily operate. You ought to keep tabs on competitors even if you don’t intend to include the data in your report. Best case scenario, you have some good news to offer in your presentation, your strategy is better! Worst case scenario, after the reverse engineering the procedures of a competitor, you may present another possible solution to your client\boss.
Now go track some metrics and deliver results!