When it comes to making sure your marketing gets the result you want, knowing the ROI of each channel is imperative. While there are many channels to chase in today’s fast-moving business world, it’s up to each marketer to learn which channel is the most efficient for you.
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Hey, what’s up? And welcome to Hack My Growth. In this episode, we’re going to be discussing which digital marketing channels have the highest ROI.
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Why Is This Question Important?
Why is this question important in the first place? Well, with a limited budget, which most businesses have, large or small they have a very finite amount of money they can spend on marketing, you need to make sure that you’re getting the best results. Instead of cutting your marketing budget by guessing, you can make the right decisions and allocate the money where it should go. Guessing is not a cheap solution.
Where Do Marketers See Their ROI?
We’ve got some past data. This is from 2016, as you can see, from marketing charts.com. Where do marketers see their ROI, their ability to measure actual ROI? Now, at the top of this list in 2016 was paid search, followed by email marketing for acquisition, then emails for engagement, going down the list, affiliate marketing, lead generation, automation, and down further from there. As you can see, at the top is paid. They’re able to measure their ROI, see directly the money that they spend, and the money they give back.
Some of the channels that have performed poorly in the past that I think people still struggle with, are things like video marketing. While it’s a great channel and it can be very, very useful, if you don’t know how to measure the ROI of that channel, it can be very confusing. That’s maybe why it got that grade of 49 back in 2016. Now, video has risen. There are more video marketing tools, video marketing, analytics tools, but some other tools that had a hard time are social media, content marketing. A lot of these are mediums that you really have to gauge people’s engagement interests, their “likes.” But that’s something that’s hard to really measure in terms of business dollars. Harvard Business Review did an article a couple of years ago about the value of a Facebook like. Is it really valuable for a business or not? And really what it came down to is it really didn’t translate into sales.
Is Investment Delivering Results?
So, businesses and marketers need to make sure that the channels they’re investing in are actually delivering results. Looking at a little bit more current data, this was done by Search Engine Journal. They polled their users, and what channels are developing are getting the highest ROI for them, without a doubt, organic search came through. A lot of their readership is COs or people in the search community. Paid was very high. Social media was still at like 20%. And email was actually a little bit less, which I found to be really interesting because over and over again, email has performed very well for us.
How Do We Choose Channels?
What does all of this have to say when we’re choosing the channels? We can’t just rely on industry numbers. We can’t rely on people’s assumptions, or what they’ve done, or what they’ve gotten out of it. As we see, marketing has moved a lot from mass marketing into relevant marketing. In the past, you could do mass produce, mass volume, mass appeal products, push products, push features, and people would buy, because there were limited channels that you could reach them on. This has slowly shifted over the years, and rapidly shifted over the last 10 years, as we’ve gotten more into customer marketing, loyalty marketing, and then today with relevance.
We have so many different channels. We have so many different options, and so many different ways to reach people, each market, each channel, each business needs its own specific strategy. We can’t just say, “Well, if you’re in this sector, only go after search, or only do PPC,” because we have so many different ways that we can touch people, and oftentimes we are touching them on more than one level.
It Takes More Than One Channel
We have to understand that it takes more than one channel. A Salesforce article and this was in 2015, so this is even old data, said, “It takes six to eight touches to generate a viable sales lead.” That might even be more today, but I would guarantee that it’s probably about that. I see anywhere from a six to eight, and in some industries it takes a little bit more than that. But before you could understand which channels are the best, you have to know what your goals are. So you have to define your KPIs. You need to know exactly what is a good engagement, what’s a good lead, or maybe a certain touchpoint that really matters to you. Then you need to find a way to track those.
Use Data to Determine Best Channels for You
Google Ads makes it very easy by setting up your conversion targets. Anytime you have a pixel or something like that where you can physically see, “I spent this much money, I got this many leads,” it’s very helpful for you to track that. You can do that with emails. “I sent this many emails that translated into this many sales. I grew my organic traffic by this percent, and this is the amount of conversions I’ve gotten.” You need to be able to define those and then track those. And then what you can do is adjust your channel focus, based on your needed results. The best marketing ROI, or the best channel that’s going to produce the best ROI, is going to be dependent upon you, your business, and your targets. Until you have those set out, you can’t just trace an industry trend or what you have seen somebody else do because it might not be right for your business.
Define your KPIs, track your KPIs, and then adjust your focus, to make sure you’re getting the best fit, because you’ll find out that maybe your best channel, might not be one of the ones that was discussed earlier in some of those results. You may have seen much better results from one channel than somebody else in your industry.
If you have any questions on this, please comment below. We’d love to continue the conversation online, and until next time, Happy Marketing.