How to Calculate Potential ROI on Digital Marketing Spend

If you’ve ever considered paying to outsource your marketing (read this post if you’re not sure whether or not that’s a good idea) one of your main concerns is likely ROI.

Will you get a return on investment from the money you’re putting in?

Or will you just be washing it down the drain?

Rest assured that if it’s done right, outsourcing your digital marketing doesn’t cost anything. In fact, it pays you instead.

It’s the closest you’ll ever get to planting a money tree. Or having your own ATM.

How do I know? Just hear what our clients have to say¬†ūüėČ

In this video I walk you through the exact ROI calculator we use with potential clients to determine whether working with us for their marketing campaign would be financially viable.

I also discuss how to figure out what search volume your ideal search terms are likely to get on a month-to-month basis, along with how to know which terms would be profitable to go after in the first place.

What I cover in the video:

  • 0.00 – Intro to video
  • 1.27 – Finding terms to rank your business for and why high average lifetime customer value is important
  • 2.24 – Understanding keywords (what people type into Google when searching for a product or service) with commercial intent, and how to find keywords and related keywords with the Google keyword planner
  • 7.30 – “Related searches” another way to find good keywords
  • 8.22 – Analysing competitor sites to find keywords using¬†their onsite content
  • 10.15 – Using¬†KW Finder to get more accurate monthly search volumes (Google keyword planner¬†shows wide ranges which aren’t that useful)
  • 11.50 – Explanation of¬†how the ROI calculator works, with a demonstration using the keywords we found in the first part of the video
  • 16.20 – I mention setting up your website for increased conversions (the number of people who call / email / get in touch with you after visiting your website) which will result in higher ROI. I did another video on this showing how real businesses could improve their websites for conversions here.)

Speed the video up to make the most of your time

Life is crazy busy and your time is valuable, so I don’t want to waste it.

For that reason I added a kind of contents below the video with time stamps. That way you can watch the bits you’re interested in and skip everything else.

If you want to watch the whole thing though, here’s a tip to make it lots quicker:

On the youtube video, click on the little cog icon in the bottom right hand corner. In the pop up, choose “Speed”, then in the Speed options choose 1.5 times or 2 times faster.

It’s kind of like speed reading for video. You’ll be surprised how good your retention of info is even at double speed (and no, it won’t make me sound like a chipmunk..)!

Some important points to follow up the video:

  1. As I explain briefly when filling keywords into the ROI calculator, you’ll notice that I didn’t restrict the location in KW Finder to state / city but found the national search volumes.This means that the search volumes I put into the spreadsheet (and therefore the potential ROI) is higher than it would likely be in reality.For sake of time efficiency in the video I didn’t do this completely accurately, but for a real-life campaign,¬†I would get the search volume for keywords with geo-locators at a national level, and for those without geo-locators at a state / city level as this will give a much more realistic search volume.
  2. The $1200 marketing spend I put into the spreadsheet is a bit low for targeting 6 keywords, and would be more realistic for a campaign starting with 3 keywords. Marketing spend depends on many factors including how competitive the market you are working in is, how many keywords you would like to get visibility for, whether we’re also trying to rank you in the map results etc.¬†If you would like a specific quote for partnering with us on your next marketing campaign fill out the application form here and let’s chat.

If you want to work out your own potential ROI:

If you would like to do the math at home, all you need to do is:

  1. Find your keywords
  2. Find monthly keyword search volume
  3. Get the total monthly keyword search volume
  4. Figure out where you’d like your website to be ranking
  5. Use the percentage click through rate of that position to work out expected monthly website visitors
  6. Decide (or use previous data) how many website visitors are likely to enquire about your services
  7. Work out how many enquiries you need to get for someone to buy from or work with you
  8. From points 5 – 7 work out how many new sales you’d be making per month, and multiply by your average lifetime customer value (if you don’t know what that is, read this post)
  9. Subtract monthly marketing spend
  10. And tadah! you have expected ROI from working with us

All the above probably sounds pretty complicated, but it’s not really if you know the percentages and formulas. To make life easier, I put together a cheat sheet with all the formulas behind the spreadsheet for you. Just fill it out to know your potential ROI. Download it by clicking here.

Thinking of working with us and want to shortcut this process?¬†Use the button below, fill out the application form on that page, and we’ll do all the math for you.


Tools and links mentioned in the video walkthrough:

KW Finder
Google Keyword Planner
Moz article on organic click through rates

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