ROI and Measurement

Introduction to Measurement and ROI of Digital Strategies

ROI, analytics, and measurements are now vital functions to every single company.

This article addresses ROI, how to use analytics for better business decisions and determine the ROI.

Many jobs are created for people with analytic skills, managerial and analysts. We are moving towards an increasingly data-driven society.

The amount of data produced in the world every 2 days now is equivalent to the start of human history until the year 2003.

Many platforms need to be created now to keep up with the explosions of data.

Big data is growing rapidly, it collects the application of artificial intelligence, web browsing data trails, social network communications, sensors, and surveillance data.

You can’t measure it if you can’t manage it

Peter Drucker

Many business owners, marketers, business leaders approve the importance of measuring and collecting data. However, most do not know how to translate all these data into ROI.

Data collected benefits organizations at every level including retailers, service providers, product development, government, and manufacturers.

Bigger and more data is no data unless you know what to do with it.

Facts collected from Columbia Business School:

  • 91% of marketing leaders believe successful brands use customer data to drive future business decisions.
  • To effectively measure the ROI of a company, the right data must be shared. 87% agree with capturing and sharing the right data.
  • 37% did not mention the financial outcomes when asked to define ROI.
  • 22% base marketing decisions from their “gut instinct.”
  • 77% maintain getting traditional and digital marketing to work together remains a major goal.

We can tell from the above that most companies do not know how to use the data collected. Successful companies like Google make data-driven decisions for example to launch Gmail, Google+, Android OS, and Google Apps.

All done, while Yahoo is still struggling with what to do next and where to put its priorities on.

Successful companies in the modern world make use of data to find actionable insights, discover new markets, do quick implementation and innovations to win more contracts, get to market faster and beat out rivals.

4 ways to learn how to effectively institute measurement practices at your company:

  1. Select your key metrics to measure carefully – Taking the time out to choose good metrics based on your objectives is critical to success. You are what you measure.
  2. Agility – Always stay open, look, learn and take action. Digital measurement happens in real-time. It is better to set up the practice of examining continually what is occurring than what is right. Take action and continue learning and you will have success.
  3. Integrate departments into decision making – Departments within an organization have to be integrated and work together to make better decisions and explanations of decisions.
  4. Analytics is a people business. – Analytics is one resource and competency in your company, always remember the 10/90 rule. Software to measure, generate the data should take up 10% of the cost. And 90% for people who analyze and identify the actionable insights. Learn to locate your resources and cost appropriately.

Why Do We Do Measurement?

More businesses and companies are spending money on digital marketing and media technologies in 2013.

The spending on this channel is 2nd from the television channel and has overtaken all print advertising combined. It is estimated that in 2018/2019 it will be expected to equal television channel spending.

Since more and more companies are investing in digital media channels. The more important question has to come: “Am I actually getting results from it?”

ROI is the final word for any marketing campaign, it proves how well the company is being managed, how successful is the campaign in terms of website traffic and profits.

ROI stands for Return on Investment and measures the total margin that total operation nets. It includes all operation spendings in addition to the advertising expenditure.

ROAI/ROAS stands for Return on advertising expenditure and return on advertising spend. They measure how much revenue you are making for the dollars you spent on each digital media channel.

Formula for ROAS/ROAI:

Formula for ROI is:

In order to make an accurate ROI, you have to stay consistent. For example Company A invested at the start of the year of $150,000 on ads or any marketing campaigns. And at the end of the year, the gain from this channel is $250,000.

The ROI, in this case, will be ($250,000 – $150,000) = ($100,000/$150,000) X 100 = 66 percent return on investment or 1.6 – 1 ROI.

Have clear criteria and goal for success in calculating your ROI:

  • Define your ROI goals
  • Establish the gain or “return” for example (sales, profits, and value to shareholders).
  • Have a timeframe to achieve the goals for example (18 months, 12 months, etc). It can be expressed as follows:
    • Triple the sales in a year or so.
    • Increase profits by 30% within a year.
    • Gain 250 new customers within 2 months
    • 25% increase in conversions within 4 months.
    • Decrease customers’ complaints by 50% within a year.

Definitions of Analytics

More than 87% of people are willing to pay more for a great customer experience with a brand.

One primary goal for businesses is to create the best customer experience at the highest price consumers are willing to pay for.

Companies in the past used to differentiate themselves from competitors with the products and services they made. Obviously you need good products and services to the market but you need more now. Consumer experience is now a new differentiator.

Digital marketing used to be about having a website. It now encompasses more than a website such as having a strong presence in digital media (owned, paid, earned and shared media), search marketing (organic, PPC), social media, mobile.

Analytics help digital marketers to understand consumer behaviors and evaluate customer experiences.

Digital analytics sounds complicated but it’s not. Companies need to ask and answer these four questions before they start establishing their measurement plan.

These four key questions help you understand digital analytics and ROI easier.

  1. Why does your website exist?
    • You need to know why you created a digital presence to know what you want to measure for. These reasons have to be connected in some way to revenue for example (selling of products, email capture, building database, and downloading relevant content, website traffics, information sharing, etc). If you do not link it up with revenue, your digital marketing effort is an expense and you will be wondering how you can ever recoup back the expenses.
  2. Your target audiences?
    • In every business, there are good and worse customers. In life, as well as digital marketing, there are people not worth wasting time on and there are people worth spending the time with. Segmentation helps you understand who is worth spending time and who is not worth the time, money and resources.
  3. How does your audience find you?
    • People come to your website in many ways, you need to understand where they come from. They may come from search marketing (SEO, PPC), social network (LinkedIn, Facebook, LinkedIn, etc), direct from word of mouth, and more. Find out how your site visitors come to your brand and examine if it aligns with the time you are spending on such as time, money, and resources. Understand if you are attracting the people you want for your business.
  4. What action should your customers take?
    • What should your customers do when they reach your brand? Why is your business on the Internet, who are your attracting, how can you reach the most valuable targeted audiences? You need to be very clear about this, in order to generate revenue. What are the criteria for selecting the measurements that matter most for your business?
    • Answer the four questions (why, who, how and what) give you perspective and context.

Web Analytics

There are 2 types of web analytics mainly on-site and off-site analytics. Web analytics consists of measurement, collection, analysis, and reporting of data for purposes of improving website performances and web usages.

Measurement in Digital Marketing

You may not need all of them I have covered below but you definitely need to know all of them.

These are the key digital marketing measurements based on my experiences working in this field for the past 6 years.

Website analytics is like a GPS used for navigating the directions of your digital marketing program. Google Analytics is free and the most common software created by Google to track data.

On-Site Analytics

Here are the more important measurements to make for your business digital marketing strategy. On-site analytics tool like Google Analytics help to answer the following questions:

  • Who are the visitors you would like to attract?
  • What action do you want them to do?
  • Why is your website created?

Unique Visitors

This metric provides a count of how many different people entered your site within a short period of time, usually 30 days.

Every business needs to create awareness and Google Analytics’ unique visitor section helps you understand if you are heading in the right direction.

You will better understand your website performance and build your momentum.

Bounce Rate

The bounce rate refers to the percentage of people who view only one page, and the time retention they stayed on the website before clicking off.

This helps to inform you of your site relevance, whether you have targeted keywords within your niche on web pages and blog posts.

If your website is relevant, people will stay longer on the page and likely to view more than one page.

It is always better to have a lower bounce rate percentage.

For example, if your bounce rate is 25%, then 75% of the people view more than one page.


For every business, there are going to have the best customers and the worse customers. You need to be able to understand this wide disparity and focus on the ones with the highest value to your business.

Traffic Sources

You can tell which channels the customers are coming to your website from this section metric. There are many digital traffic sources people come from such as social networks, search engines, other sites, direct.

You can also drill down to specific sources such as Google, Facebook, another website where the traffics is coming from.

Learn about the time spent of each traffic source: retention time, visitors and the bounce rate for the special properties in each.

From the percentage from each traffic data, you will have better information about how people come to your website. You can re-evaluate your strategies and create a better outreach campaign.


Keywords are what people key into search engines to come to your website. Keywords can be found on your Google Analytics dashboard in the traffic sources section.

A balance of branded keywords and words related to your industry you are competing in is good. It means that people are searching for your site both because they know your brand and they have unmet needs.


Which of your web pages or blog posts are being viewed more often? Are your visitors exploring your web pages and blog posts based on the journey you want?

Content drilldown give you the best insight about every single web pages and blog posts.


Conversions are sales, you need to know what actions your customers should take when they enter your website. Do you want them to buy your products online? Download ebook, video or whitepaper? Subscribe to your newsletters or blogs? Collect their emails?

The above are some of the conversions examples you want your visitors to do when they come to visit your website.

Avg Shopper Value

This metric gives you one of the best measurement data to watch if you sell products and services through your website.

The data will show you how much do shoppers buy, do they buy one, two, three or more products?

It will give you information that will allow you to positively affect sales with unique strategies.

When you know the average shopper value, you can strategize a plan to increase the sales and measure the results.

Abandonment Rate

This is the group of people who show signal of buying by clicking the add-to-cart button but failed to complete their order.

If your conversions and average shopper value are not up where you think it should be. Abandonment rate is the number one place to look for a solution.

A general abandonment rate can vary between 55 to 75 percent.

Off-site Analytics

These analytics help to measure the performance of digital media and search marketing. It helps you determine your ROAI and understand if the digital media you published is working.

Off-site analytics answers the following questions:

  • How do your visitors find you?
  • What actions does your visitors take on your website?

CPC (Cost Per Click)

Cost per click is often used when advertisers have a set budget usually on a daily basis. Once the budgeted cost is reached, the ads will be removed from the ad rotations for the rest of the period.

CPC stands for the number of clicks people click onto the banner or the ads. A website that has a cost per click rate of example $0.20 will provide around 500 clicks if the budget is set to $100. ($0.20 X 500 = $100).

CTR (Click Through Rate)

This is calculated based on impressions and the number of clicks it received for one ad.

For example if an ad is displayed 1000 times (1000 impressions), and received only two clicks. The click-through rate for this ad will be 2%.

CPA (Cost Per Acquisition or Cost Per Action)

CPA is more result-driven, and are typically used to measure results of acquiring something. Business usually has this goal in mind such as acquiring new customers and making sales.

Cost per acquisition is more appropriate in the scenario when the company is only tracking for sales and profits. All cost per action might not lead to sales and profits.

Cost per action measures wider perspectives such as collecting contact information, emails, newsletters signups, purchases and more that are linked to the advertisements.

Measurement for CPA can be calculated as follow:

Digital ad or media cost to drive acquisition/action divided by the number of new leads, acquired sales, and new actions performed like (new email addresses, contact information, website visitors, and more).

Keyword Rank

More than 90 percent of customers go to the website on the first page of search results. Beyond that, around 47% of consumers click on the number one result they see on search.

People Talking About

It is one insight available on Facebook insights to check on the engagement rates. The key reason for businesses and people like to use social media is engagement.

“People talking about” in Facebook insights give you data of the unique people who have liked, share, comment, and mention your brand on Facebook.

The more people engage in your Facebook page usually meant that your brand is creating a positive buzz.

Followers and Competitors’ Followers

These are the people who are interested in your brand, the products, and services. It is best to capture sales from your followers and your competitors’ followers, thus it is better tracking from both ends.

Followers are a good metric if your brand currently using and are active on Pinterest.


Retweets works the same way as engagement in Facebook discussed earlier and repins on Pinterest.

This metric measures quality rather than the quantity of your tweets.

Comments and Pingbacks

If you have a blog on your websites, backlinks or pingbacks should be tracked and measured. It shows how well your blogs are performing and help you imitate, learn from other bloggers content as your own.

Customer Voice

A digital presence is created around what you think customers want but only customers know better about what they really want. The two methods that help to determine these are surveys and A/B testing.

You can use surveys to ask simple questions like:

  • What are you looking for?
  • Why do you come to this website?
  • Did you get what you want from this website?
  • Do you think the website navigation is simple?
  • Will you come again?
  • How can we improve to make your website experience even better?

Key Performance Indicators

KPIs stand for key performance indicators and the key metrics to help you understand how well you are doing against objectives.

You can have metrics like website metric #1, #2, #3, social media metrics, sales metrics, and more.

Identify the most important metrics and create your KPI scorecard. You do not need a lot of metrics, just select the few most important ones. You need to know where to source for the metrics, take action and report on them regularly.


KPI is a scorecard actionable to keep your business on track, while ROI stands for the measurement of the direct financial impact of the strategy of your business.

An example of a KPI is the percentage of people that take up the offer to download your pdf ebook, sign up for free trials, newsletters, website traffics, and more.

While ROI is the amount of sales, conversions, profits generated from all the KPIs activities.

ROI helps to measure the gains and losses of the company from the company operation standpoints.

ROAI can also be determined by examining the amount spent on digital media. We can gain information from cookies, measurements, tags from web analytics. We have better data on which channels are driving the visitors, and how many did conversions.

We can then identify which are the overachievers, underachievers and adjust our spending accordingly.

ROI, KPI, (ROAS/ROAI) are correlated.

Annual Customer Value

Every company should be able to have an estimate of how much the customer is worth on an annual basis.

Some companies like airlines, cars, hotels calculate even calculate Lifetime Customer Value, their key customers have a value worth retaining.

Measurement Tools

There are many tools to help measure your goals, ambitions, and budget for your digital marketing.

Having and selecting the right measurement tools play an important role in your digital marketing goal.

Search Marketing Measurement Tools

Search engine optimization and a high search rank is crucial for businesses. You need software to check on your rankings, backlinks, domain authority and page authority. The tools below are some of the better ones I used for your consideration:

Competitive Intelligence

These tools help you gain an advantage and measures your competitive performances.

Competitive intelligence tools help you know more about your competitors online than they might even know about themselves.

Every business should have one or two competitive tracking and business intelligence in place.

Website Analytics

The core analysis for any digital marketing measurement is analytic of your website. Google Analytics is a free software that has the capabilities to provide you with the most robust data and fit the needs of most companies.

However, if your companies needs more customization and track more specific areas not determined by Google Analytics. Other services are available to get you another level of detail.

Google Analytics

Google Analytics is the most widely used website statistic services. The software is built for marketers instead of webmasters.

It generates detailed statistics about the website’s traffic, traffic sources, measure conversions, and sales. It is one service provided by Google.

IBM Analytics

IBM analytics is a core metrics powerful web analytics. It is usually used for eCommerce, retail, media company, financial services, publishing, and travel verticals.

Social Media Tools

Companies that are active on social media. Social media tools provide insights to consumers coming from social media.

They answer questions like, is someone who likes your brand more likely to buy and recommend to a friend? Does “buzz” contribute to your business growth? Compare the likes, frequency, comments of competitors’ social media strategies?

Big Data and Dashboard Display

  • Apache Hadoop
  • Facebook Insights
  • Youtube Analytics

A self-service tool created by Youtube to provide you with the most detailed statistics of your videos and viewers. It gives you insights on how people find you, how long they watch the video and when they leave.

You get to understand your audiences all in-depth videos at one time or all your videos at once.

Budget for Digital Measurement

Digital analytics is a people business, so always follow the 10/90 rules.

The software and the tools needed should be only 10% of the costs and the people who analyze the content, finding the insights should account for 90%.

The Future of Measurement

The best way to know what is in store for the digital measurement is to check via the search queries in Google today.

The number of search queries, phrases, specify keywords, subjects will give me insight into the need of people. Google is the largest search engine, it receives tons of data in it, and billions of people are searching through it every second.

Here are the five I concluded will continue to grow in digital measurements:

  • Big Data
  • Cloud Storage Digital Data
  • Search Marketing
  • Mobile Marketing
  • Social Media Marketing

If you can measure it, you can manage it


Learn what measurement matters and what does not matter takes time, it is a process. Like everything we do we get better when we practice more.

We cover all about ROI, and why you need digital web analytics to help you achieve business success.

Start the learning process, enjoy it and I believe you will find your own unique way to measure your businesses.

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