As a business owner, you should already know that digital marketing is the key to unlocking your company’s potential. Digital marketing can help you attract new customers and keep your existing ones happy. Any experienced small business owner knows, That it can also be a lot of work, managing all the channels and ensuring that they are profitable. Fortunately, there are digital marketing agencies that specialize in this form of marketing. It usually flys under the banner of “optimizing digital channels”.

The Short Answer is:

The top digital marketing services for businesses that produce a significant ROI are as follows:

  • Google PPC Ads
  • Email Marketing
  • SEO

What is Digital Marketing

Digital marketing is the process of reaching out to your customers and potential customers through digital channels. These channels can include social media, email marketing, paid advertising, SEO, and more.

To put it simply: if you’re using any kind of online platform to market your business (Facebook ads, Google Ads etc, ActiveCampaign) then you are doing digital marketing!

Digital marketing is a great way to reach new and current customers, but it can be difficult to get started. Digital marketing requires a vast amount of knowledge and skills in order to develop successful campaigns.

The most effective approach is to create an online marketing strategy that outlines the goals you want to achieve with your digital marketing efforts, as well as how you’ll measure your success. This should be done before anything else because this gives you a starting point when determining which channels are going to work the best.

How does digital marketing impact your ROI?

An ROI in digital marketing refers to the measurement of the effectiveness and profitability of your digital marketing efforts. Note that the measurement can also be used for individual channels of digital marketing. An example of this is measuring the ROI from your Google Ads account. In other words, ROI provides insights into the success of your digital marketing channels and ensures that every marketing dollar spent contributes to your business’s growth through increased sales and client retention.

The ROI of digital marketing has been proven time and again by thousands of businesses around the world. 

Digital marketing is one of the most effective ways you can use to grow your business. It’s fast, effective and can help you reach more customers than ever before. 

What is a standard ROI in digital marketing?

ROI is a metric used to evaluate the effectiveness of different marketing strategies. It’s calculated by comparing the return on investment (the revenue generated from the campaign) with the cost of implementing those strategies. The higher your ROI, the better your digital marketing strategy is working.

The standard ROI for digital marketing varies widely depending on the strategy and industry; however, some general benchmarks include:

  • The standard ROI for digital marketing is a cost ratio of 5:1 – this means that you generate $5 for every $1 in spend.
  • Studies by Google have indicated an average ROI on the Google Ads platform is 800%. In other words, you make $8 for every $1 that is spent on marketing.
  • The Return On Investment for SEO is different. Statistics indicate an average of 2.8% return on investment. It is worth noting that we have never gotten a number that low. The problem is that there are many variables when it comes to SEO. Competition, amount of search queries, and the average conversion rate. We have seen approximately a 65X ROI in growth in sales for businesses in the home design and local services space.

It is worth noting that an average ROI is generally in the region of 2:1 and 7:1.

The easiest way to calculate ROI is by using a simple formula:

ROI = (Net Profit / Cost of Digital Marketing) * 100

We will elaborate further on the different calculations you could use in determining your ROI for each campaign.

What is the best ROI for online marketing?

The best ROI for online marketing is the service that gets you the most bang for your buck. In other words, it’s the service that gives you the greatest return on investment (ROI).

Why does this matter? If you aren’t getting a good ROI from your digital marketing efforts, then why should you use them? Ask yourself how can you know if something is working or not without measuring the impact it has on sales and profits.

As we mentioned above the average rate is a cost ratio of 5:1. Anything above this should be considered good.

The best way to measure the ROI from your digital marketing efforts is by using a tool called “cost-per-acquisition” (CPA). This tells you how much it costs per customer that you acquire through your online efforts. If you can decrease this number, then your marketing is working better!

The way you calculate this is by using the following formula: 

Average cost per action (CPA) = Total cost of conversions/ Total number of conversions

Step 1: Calculate the cost of all the conversions. This includes the cost of sales and marketing costs.

Step 2: Using analytics and other data to calculate the total number of conversions from that campaign. You would need tracking codes on the site to easily manage this.

Step 3: Perform the calculation.

How do you calculate ROI for services?

Calculate ROI:

ROI = (Net Profit / Cost of Digital Marketing) * 100

Net Profit = Revenue – Cost of Goods Sold (COGS) – Marketing Costs

Understanding the terminology:

ROI – Stands for Return On Investment. Essentially, the money you invest into marketing is measured against the net profit you made.

Net Profit – Net profit is the profit that is generated after expenses. This includes taking the revenue and deducting the Cost of Goods sold (sometimes called cost of sales) and also deducting your marketing costs to get to Net Profit.

Cost of Digital marketing – This is referring to the cost of digital marketing for the campaign. It may include Ad spend, agency fees and other costs on the marketing campaign such as software or tools.

Revenue – The revenue refers to the amount of money the campaign has generated.

Cost of Goods Sold – This refers to the total cost of all or any goods through the marketing channel. Some may interpret it as cost of sales, although cost of sales sometimes takes into account the marketing costs as well. 

Marketing Costs – This is the total marketing costs for the digital channel that the company sustains.

It’s important to note that ROI calculations should consider both short-term and long-term effects. This is because some leads may convert immediately, while others might take months or even years to become paying clients. Additionally, the lifetime value of a customer is a crucial factor to consider in service-based businesses, as it can greatly impact ROI.

Also, keep in mind that tracking and attributing revenue accurately to digital marketing efforts can be complex. You may need to use tools like Google Analytics, CRM systems, and marketing automation software to gather data and make your ROI calculations more precise. 

Regularly monitor and adjust your ROI calculations as your digital marketing campaigns evolve.

What is the ROI for Social media management

Social media management is an essential part of your digital marketing strategy. It’s one of the most cost-effective ways you can reach new customers and grow your business online, but it can be difficult to track ROI. This is mainly due to the nature of social media marketing. Many businesses use it primarily for engagement and connecting with people in their community.

There are numerous ways of calculating the ROI for social media:

The good news is that there are plenty of ways to measure social media ROI, whether you’re looking at engagement rates or conversions from organic posts or paid ads. Here are some tips on measuring and maximizing your ROI:

Social media ROI = (Earnings – Costs) x 100 / Costs

You can use this model for most social media ROI campaigns such as :

Social Media ROI % = Profit / Investment x 100 

  • Profit is the amount of money that the business made after the cost of sales has been deducted.
  • Investment refers to the cost of the marketing campaign.
  • The final number is one hundred and is calculated as a percentage.

You can analyze your data to find a specific ROI for each social media network by segmenting your earnings and costs for each social media channel.

If you had to average out the highest ROI for social media you many find it would look something like this:

  • Facebook has the highest ROI.
  • Instagram has the second highest ROI.
  • Thirdly, LinkedIn has the third highest.
  • And lastly, Tiktok has the fourth highest.

The reasons this vary so vastly is mainly due to the demographics of each of the platforms. For example, if there is an older generation they may spend more money to buy things unlike a 12 year old would.

What is the ROI for Paid Ads – PPC or Social Media Ads.

Paid advertising can be a great way to get your name out there. It’s also one of the most cost-effective ways to market your business, especially if you have a limited budget. This method of marketing is both fast and efficient.

In order to calculate your ROI you need to know how much money was spent on each campaign and what the return on investment (ROI) was for each campaign before comparing them against each other.

Here are some tips for calculating ROI and ROAS for paid advertising:

  • ROAS = Ad Revenue/ Ad Spend
  • PPC ROI = (Profit – Cost) / Cost

ROAS refers to an ROI measurement called return on Ad spend.

What is the ROI for Content Marketing

Content marketing is a great way to reach your target audience. It’s also a long term investment that can be used for lead generation and achieving your business goals. 

Content marketing helps you build trust with customers by providing them with valuable information they want to read, which will make them more likely to buy from you in the future. 

These pieces of content could be blog posts that help the user with useful information or how their product works as well as case studies.

How to calculate the content marketing ROI of a campaign:

Content marketing ROI = ((Return – Investment)/ Investment) x 100%

Let’s make this practical: if you spend $500 to create a piece of content marketing material (let’s say a case study) and you generate $6000 for that piece of content, the conversion will be measured in this manner.

Content marketing ROI = (($6000 – $500)/$500) X 100%

Content marketing ROI = (($5500)/$500) X100%

Content Marketing ROI = 11X100%

Content Marketing ROI = 1100%

What is the ROI for Search Engine Optimization

SEO offers the lowest cost per lead. This makes it one of the best long term strategies for businesses that rely on leads for their business. Types of companies may include professional services (such as Lawyers and Accountants), to contractors such as home remodeling or even plumbers and electricians. There are many more types of companies that benefit from acquiring leads. In fact, most businesses can benefit from this. 

You should expect an ROI of at least 5X depending on the length of the contract and your conversion value and the amount of search queries per month.

How to calculate the ROI of SEO:

Return On Investment (ROI) = (value of conversions – cost of investment) / cost of investment

The above formula will help you determine what is the ROI on your SEO strategy.

You should always invest in digital marketing that generate a positive return on invest

This tends to be a no-brainer, however, most business owners seem to think “it can help” their business. If you are allocating a marketing budget you should bear in mind that the budget needs to help boost sales.

If you invest $2000 per month over 12 months for SEO services you should expect to make some of that back at the end of the 12 months. If you have spent $24000 on marketing, one should expect a return on the marketing spend. It may be $50000 or $250000, it definitely shouldn’t be a $1 return on the marketing spend.

Please keep this in mind.

Digital marketing services can help your business grow faster than ever before.

Digital marketing services can help your business grow faster than ever before.

Digital marketing is a great way to reach a wider audience and target specific customers, which means it’s the ideal method for finding new customers. Because of this, you can attract potential clients from all over the world while also increasing brand awareness in your local area.

At Kak Varley Digital Marketing Agency, Our team has been helping companies grow since 2015 through our expertise in all areas of digital marketing. We provide everything from SEO and PPC Ads management to social media management services and more in order to help businesses succeed online.

Our staff are the best at what they do, from optimizing PPC ads campaigns to crafting the best email marketing copy you will ever see. All areas of digital marketing are covered and ensure you achieve your revenue goals from each campaign we generate for you.


Understanding what ROI is and why it matters is crucial when starting digital marketing. It can help you better plan your marketing strategy and measure the effectiveness of your digital marketing campaigns. At the end of the day, every for-profit company needs to make a profit. Measuring your channels can help you understand what is working and double down on that. If you feel like this post helped you or you could benefit from some of the services please see our digital marketing agency page to learn more.

Kak Varley Marketing – Bring Value to your Digital World

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