The decision whether to launch a digital marketing campaign is a complicated one, but it doesn't have to be a decision you make blindly. Ask your agency for the data necessary to make an informed decision; that data is available for free online. For example:
- Are people out there searching for your service? Google will tell you the average monthly search volume for relevant keywords.
- Is pay-per-click a good option? Google will give you all sorts of information on the cost-per-click, competition for specific keywords, and more.
- What are your competitors paying for clicks? SpyFu is a great service that has many free options for competitor analysis.
- Most importantly, what is the potential ROI for your campaign? Using your AdWords and Analytics, we can easily run the numbers to figure out what the potential return-on-investment would be from your hypothetical marketing campaign.
How do you do this? First, start with the overall search volume for your relevant keywords:
Then, project out what you'd be willing to spend for both paid and organic traffic. One equation to use is this:
Estimated monthly traffic (number of visits) x conversion rate of traffic (%) = Number of Conversions
Number of Conversions x Average Order Value ($) = Estimate monthly revenue in Dollars
Estimated monthly visits (number of visits) x cost of traffic ($) = Cost of traffic
Estimated monthly revenue / Cost of traffic = ROI for digital marketing
Now, obviously this is slightly different for PPC advertising, which brings paid traffic, and SEO marketing, which brings organic traffic. For this company in the software bootcamp space, their numbers look like this:
600 clicks per month x 1% conversion rate = 6 conversions x AOV of $10,000 each = $60,000 in monthly revenue. With a monthly cost of $10,000, the ROI is $6:1.
This is the type of equation and background research your digital marketing agency should be doing for you - before you sign a contract. For your free digital marketing assessment, click on our Request a Quote button.