How I calculate ROI?

You need to continually measure your message and your creatives with your publishers to create a culture of testing. This is made easier if you first set out KPIs such as:

  • Click-through rates

  • Interactivity rates

  • Expansion rates

  • Bounce rates

  • Page views

  • Average time on page

  • Direct traffic sources

  • Conversions

Another method of analyzing success is measuring your ROI. A wise man once said, show me the money,"and as a marketer, I want to see my hard work has paid off. So here how I calculate ROI, by the following the example;

Let's say I want to convert 15 New Customers?

I have Media Budget gets you 150,000 ad impressions with an estimated CTR of 2 percent (although it will usually be a lot lower)

That website that hosts your ad gets 3,000 unique visitors and you are aiming for a 10 percent conversion rate (again, normally this is lower). This results in 300 inquiries. Your publisher tells you that 20 Percent of these will be quality leads, so you get 60 sales leads.

And since your publisher also tells you that usually one in four sales leads results in a conversion, that is 60/4 = 15 new customers.

Now you have met your business objective, but you also want to check your ROI. So if each new customer buys a product worth $100, your ROI is 15x100 = $1,500

In addition to hard metrics such as conversions (which are the ultimate goal), you can use soft metrics such as:

  • Page or ad impressions to determine whether your campaign is delivering; if you have million ad impressions but nothing has happened, something is fundamentally wrong.

  • CTRs to measure which creative is most engaging.

  • Unique users and impressions to assess your reach and coverage.

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