In economics, when talking about any investment, we often hear ‘ROI‘ mentioned: nothing particularly complicated nor mysterious, let’s specify it right away.
It is a principle that underlies the behavior of anyone who invests money in a business hoping to create something profitable. The term Roi comes from Anglo-Saxon parlance and stands for “Returnon Investment”: which in Italian can be translated as “return on ‘investment,” which is a parameter that indicates the profitability of the capital invested.
To give a practical example, if I invest 1,000 euros in something and months later that something is worth 1,500 euros, my Roi will be 50 percent. All in all, a good percentage.
Let’s imagine that we have to transpose this to a field of marketing for the web: again, the Roi will be a useful parameter to understand what kind of investment we want to sustain and how much we think this can have margins for a future return. The first thing to do accordingly is to establish the budget we think we need and want to allocate; then to understand what the expected, or at least hoped-for, benefits might be. And this is where the differences of Roi in web marketing versus classic marketing come into play.
ROI and benefits of the web
With reference to what has been said so far, it is easy to understand how in marketing terms the web has significant advantages over the world of traditional media: or at least how there are wider potentials that, if exploited properly, can lead to satisfactory results. As a starting assumption, the web definitely has a larger, potentially infinite user base: of course, this can be a plus as well as a minus. We must always keep in mind what our target audience is and avoid detaching ourselves too much from it in order to avoid wasting money and time.
With this rule in mind, we can take advantage of what is the benefit of such a large catchment area as that offered by the web. Once we have focused on our target audience we can, in the next steps, figure out for sure which potential customers are actually interested in what we are proposing. Marketing on the Web allows us to accomplish this with a fair amount of data grounding.
Take for example the Adwords PPC campaigns that are so popular on the Web; with proper campaign monitoring we can gather various information on the clicks obtained by going step by step to monitor the traffic generated and thus obtain the estimated Roi. The same goes for banner campaigns: by monitoring the progress of these we can get a detailed picture to understand if we are investing our money well or if something should be changed.
Tips for improving ROI in PPC
Having come to this point, it is good to specify that there are no certain procedures for predicting Roi even in the world of the Web because we cannot know with absolute certainty the performance of our future campaigns: however, one can try to optimize our efforts reducing the margin of error as much as possible. Among the stakes to be followed is undoubtedly that of creating good ads that are as web-friendly as possible: for this reason, at least a good knowledge of the Internet tool is the basis of any marketing campaign. The ads created must be as optimized as possible for the reference sector and attractive, otherwise they will not receive feedback thus going to generate poor conversions. And, as obvious, also going to negatively affect the Roi.
A good knowledge of the dynamics of the network and the tools used in the web allows us to monitor our campaigns and understand if they are going in the right direction. As well as to analyze our target market to carp about what is deemed most functional to our objective.
