September 8, 2021 | By: Emily Dundee

Which Online Marketing Strategy Has the Biggest Impact on ROI?            

Return on investment in digital marketing is an incredibly valuable business metric that should not be ignored. Several types of online marketing channels are available, from social media and email lists to paid ads and in-depth search engine optimization. In order to achieve consistent growth, companies must leverage these channels and follow the proper steps to maintain optimal return on investment.

But which marketing method has the highest impact on overall ROI? Let’s discuss.

What is Digital Marketing ROI?

In the world of digital marketing, Return on Investment (ROI) is known as the measure of profit or loss generated on your campaign efforts. A positive ROI essentially means that a campaign is making more money than what was spent—and vice versa for negative ROI.

As a rule of thumb, digital marketers should aim for an average ROI of 5:1 — that’s $5 gained for every $1 spent on a marketing campaign.

And if this doesn’t satisfy you, set the bar a little higher! Exceptional marketing ROI is considered 10:1 or higher. It will likely require more resources and knowledge to achieve this goal, but it is possible, nonetheless. On the other hand, ROI below 2:1 is non-profitable and is indicative that your marketing strategy needs some work.

Why Measure ROI in Marketing?

Measuring ROI is critical in digital marketing to determine the success of your campaigns. Otherwise, you would be marketing “blind” and potentially wasting your budget. Obviously, ROI will vary depending on the campaign type and other contributing factors. But by analyzing the results, you will be able to confidently take actionable steps toward improvement. The more familiar you are with marketing ROI, the better your campaigns will perform. In this article, we will discuss which online marketing campaigns have the highest ROI so that you can plan your marketing strategy accordingly.

How To Calculate ROI in Marketing

Calculating ROI values in digital marketing is simple. A basic ROI formula would look something like this:

roi formula

Which Digital Marketing Strategy Has the Best ROI (1)

Top 4 Digital Marketing Strategies for Success

Now that we’ve explained what digital marketing ROI is and how to calculate it, let’s explore a few different campaign strategies that are known for their positive ROI. We’ll explain the pros and cons of each to ultimately decide which strategy offers the best revenue return.

  1. Search Engine Optimization (SEO)
  2. Email Marketing
  3. Social Media Marketing (SMM)
  4. Pay-per-Click (PPC)

1. Search Engine Optimization

Search engine optimization, or SEO, is one of the most successful and widely used digital marketing strategies for growth. When properly executed, SEO marketing can deliver impressive results at a very low cost.

SEO marketing has an average ROI of 22:1 — that’s 2,200 percent!

Effective SEO can give businesses huge opportunities for driving traffic to their website. Plus, the results are long-term. Your site has the potential to continually grow in rankings over the years, delivering positive ROI with little to no effort on your end. For these reasons and more, SEO remains one of the top online marketing strategies for ROI.

2. Email Marketing

Email marketing is reported as one of the highest ROI digital marketing strategies. It’s a well-known method that requires some initial investment but has high success when it comes to exposing your brand to customers.

Email marketing has an average ROI of 42:1 — that’s 4,200 percent!

So, in theory, for every $1 spent on email marketing, you’ll make $42 in return. It’s no wonder why this method is so popular amongst digital marketers. Creating contact lists and sending out emails is relatively cost- and time-effective when compared to other campaign methods. Also, campaign effeteness will only increase as you expand your audience and grow your email list. In addition, email marketing can be used in conjunction with other online marketing strategies for maximum effectiveness.

The primary drawback of email marketing is the fact that it requires having access to a substantial database of customer emails. Tips for building a sizable contact list include using subscription incentives, sign-up lists, and giving customers the ability to create on-site accounts. Follow these steps, and in time, you can expect results and substantial business growth.

If you are going to run an email campaign, you should consider measuring these metrics when calculating your digital marketing ROI:

  • Open rate
  • Conversions
  • Click-through rate (CTR)
  • Unsubscribe rate
  • Bounce rate
  • Leads acquired

3. Social Media Marketing

Social media marketing is another effective marketing channel that doesn’t require a huge budget or amount of time to succeed. Depending on the extent of your campaign, you can spend hundreds or thousands of dollars per month.

Social media marketing offers several valuable benefits that affect ROI, including:

  • Helps customers discover new products
  • Sparks positive interactions with consumers
  • Provides customer service and engage with followers
  • Increases brand traffic and obtain new customers
  • Contributes to overall marketing strategy

Measuring social media ROI is a bit more complex than measuring the results you’ll get from other types of digital marketing tactics. In social media marketing, you can determine campaign effectiveness by measuring specific metrics. Below we listed the top metrics marketers use to measure the ROI of social media campaigns.

  • Engagement rates
  • Click-through rate (CTR)
  • Clicks
  • Conversions
  • Leads acquired
  • New followers

4. PPC Marketing

When done right, PPC services will generate a positive ROI in digital marketing.

Return on ad spend (ROAS) is much simpler to calculate than overall ROI for PPC campaigns. The formula is essentially the same as the ROI formula we mentioned previously; it just replaces “marketing” with “PPC.”

ROAS FORMULA

This value, however, does not factor in all costs—just the cost of the paid ads. If you want a more precise estimate of your PPC campaign’s profitability, you’ll want to factor in some additional costs, such as:

  • technology & equipment
  • credit card processing fees
  • fulfillment
  • employee salaries

Unlike SEO marketing, PPC advertising is not long-term; once you turn the ads off, the campaign is over. The only lasting value is the sales from the ads while they were still active.

Which Digital Marketing Strategy Has the Best ROI?

In conclusion, SEO and email marketing have the best reputation when it comes to ROI. However, keep in mind that PPC and social media marketing are also known to achieve positive ROI.

Now, it’s up to you to maximize the ROI of your online marketing campaign. Will you choose email marketing, PPC, SEO, SMM, or perhaps a combination? Be sure to consider your company, budget, and individual marketing style before making this decision.

roi marketing

Improve Your Marketing ROI With MARION Today

If your company is looking to optimize your digital marketing ROI, MARION is happy to help! We are a marketing agency in Texas with decades of experience delivering strategic search engine optimization, PPC services, and various marketing campaigns.

Contact our team of experts today and find out how we can help you get started with your online marketing strategy.

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About Emily Dundee

Emily Dundee is a lover of all things digital marketing. When her eyes aren't glued to a screen, she's most likely eating Tex-Mex or spending quality time with her three small dogs.

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