Whether your business is a fledgling lemonade stand, or a multinational, publicly-traded company, Return on Investment (ROI) is critical in determining your current profitably, as well as your potential to leverage that return. While the marketing industry has turned ROI into a sort of “buzzword”, Hostwall has succeeded in making ROI a pivotal part of our business model. When it comes to Return on Investment, we are perpetually creating better methodologies to calculate, optimize and report on it!
Return on Investment (Noun):
The amount of profit, before tax and after depreciation, from an investment made, usually expressed as a percentage of the original total cost invested.
"return on investment." Dictionary.com Unabridged. Random House, Inc. 23 May. 2013. <Dictionary.com http://dictionary.reference.com/browse/return on investment>.
The first step for optimizing ROI is determining what drives a company's profits and developing a clear understanding of a marketing campaign’s goals. Hostwall will then help define how these goals translate in the digital marketing space. For example, when it comes to search engine optimization (SEO), some companies want to rank first for a given keyword. Improving ranking might be part of a strategy, but rarely is it the end goal of a business. What people search for and the keywords used can vary greatly from one's perception of what actually drives revenue. Hostwall does its due diligence in determining which keywords are most important by studying your competitors to determine where value can be added to help adjust the optimal set of goals for your firm. We often find that the most valuable and convertible keywords surprise our clients!
With a well devised plan in place for what constitutes a goal, Hostwall will then ensure proper tracking is in place. Accurate tracking is critical, and Hostwall's quantitative, technological experience really pays off to that end! Depending on your firm's business model, a marketing campaign can have any of several different end goals that we also assist in identifying. It could be phone calls, email sign ups, online subscriptions, lead generations, mobile calls, improved organic positioning or perhaps just increased traffic in general. Either way it all must be tracked, so that you know when it happened, how it happened, how to improve on it and exactly how much it cost.
Now that we know what you want and have implemented the necessary tracking capabilities, the calculation begins! Return on Investment is conveyed in some form of revenue or profit, in proportion to the cost or amount invested:
( REVENUE / INVESTMENT )
Hostwall consults with its partners to define the necessary assumptions to calculate costs that are outside of the purview of online marketing, but remain necessary for the actual calculation itself. From there, the campaigns have the foundation to grow or be held steady at the right time and at the right costs. All of this helps a firm to realize its willingness to spend for leads/conversions and budget responsibly in order to maximize Return on Investment.