Business Transformation

True Digital Return on investment

Steph Hermanson
.
Apr 7
.
1-2 mins

Table of contents

Key takeawaysCollaboration platforms are essential to the new way of workingEmployees prefer engati over emailEmployees play a growing part in software purchasing decisionsThe future of work is collaborativeMethodology

What's the ROI of Digital?

Digital ROI seems to get put in its own bucket separate from the return on investment (ROI) of all of your other business initiatives. It gets treated differently because there is so much to the buyer's experience with you through digital before they get to purchase in a lot of cases. So what is Digital ROI? Is it separate from other ROI you might be measuring? Let's take a look.


What is Digital ROI?

Digital ROI is the same as every other ROI you might measure. To determine the ROI of any initiative you need to create a ratio. This ratio explains that for every dollar spent there is an incremental amount of revenue you get back for that dollar.

ROI = (Revenue from Investment – Cost of Investment) / Cost of Investment

Digital ROI is calculated the same way.

Digital ROI = (Revenue from Investment – Cost of Investment) / Cost of Investment


What's the Difference Between Digital ROI and Regular ROI?

There is a difference between Digital ROI and regular 'ol ROI. It's found when you explore the definition that people tend to give to "Digital ROI." Really what they mean are the key performance indicators or metrics they are tracking to show the effectiveness of their digital efforts in marketing, sales, and customer experience.


Digital ROI Metrics That Matter

The "ROI" numbers that team members like to tout can include quite a list. I'm a big fan of Content Marketing Institute's list of how they define their digital KPIs by category:

6 KPI Categories for Digital ROI

  1. Marketing
  2. Email
  3. SEO
  4. Pay-per-click
  5. Social Media
  6. Website

Some of the KPIs they give in those categories include:

Example Digital KPIs to Track

  1. Cost Per Lead
  2. Bounce Rate
  3. Click-through Rate
  4. Conversion Rate
  5. Time on Site
  6. Indexed pages
  7. Cost per Conversion
  8. Impressions
  9. Post Reach
  10. Amplification Rate
  11. Unique visitors
  12. Exit Rate


How to Measure Digital ROI

The above is just 12 of multiple dozens of KPIs you can track when it comes to digital. Ultimately, however, it will always come back to the ROI ratio we discussed earlier:

ROI = (Revenue from Investment – Cost of Investment) / Cost of Investment


All of the above example KPIs, and all the metrics you could possibly track, don't tell you the ROI of digital. They tell you whether you are on or off track. If you are doing quality work, if you are reaching the right people, and if you are making improvements or are wasting dollars.

The metrics you need to track ROI for digital or for any initiative are how much did you spend and how much did you earn.

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Steph Hermanson

Steph Hermanson is a Partner and Chief Revenue Officer at Atomic Revenue, a revenue operations firm in St. Louis aligning your organization’s sales, marketing, and customer efforts.

Steph works on creating and managing digital strategies & programs including KPI development and analytics, web design/development, marketing automation, social media, email marketing, paid search, and more.

She is a national speaker on social media marketing focusing on data, analytics, and ROI and has worked with everyone from big brands like Toyota and TJMaxx to tech startups and small local businesses.

Andy is the Co-Founder and CIO of SwissCognitive - The Global AI Hub. He’s also the President of the Swiss IT Leadership Forum.

Andy is a digital enterprise leader and is transforming business strategies keeping the best interests of shareholders, customers, and employees in mind.

Follow him for your daily dose of AI news and thoughts on using AI to improve your business.

Catch our interview with Andy on AI in daily life

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