Digital Marketing ROI: How to Measure Demand Generation

Marketers and business owners often debate the value of demand generation. Many believe that increased awareness is enough to increase revenue, while others advocate for specific action items that will turn visitors into customers. 

The digital marketing industry has seen a boom in recent years. With more and more companies embracing the tactics of demand generation, increases in online leads and sales have led to an ever-growing need for ROI measurement. 

Play Tap City has some more information on how to measure demand generation.

Marketing teams spend a lot of time and money building up their email lists, launching campaigns to drive demand for their products, and producing content that is meant to engage consumers.

But the question remains: how do we quantify demand generation’s return on investment? The answer is quite simple: by monitoring and measuring digital marketing effectiveness, or simply put, ROI.

In this post we’ll discuss these three ways that help businesses realize how effective their campaigns are ,conversion rates, event rates, and cost per lead. 

We’ll also discuss where you can get started with measuring your company’s return on investment (MOZ).

What Is Digital Marketing? (Learn it in 5 Minutes)

1.Conversion Rates.

The most direct method of determining ROI is by measuring conversion rates. Conversion rate goes hand-in-hand with conversion tracking, when you’re able to attribute each lead that was generated in the form of an email address, contact form entry, phone number, or even social media follow , is when you will be able to determine how well your demand generation efforts are working. 

Keep in mind that it’s also important to look at not only how many people convert, but also how much value is in these conversions; in other words, if you generate 100 leads per week and they all sign up for your newsletter (which has low monetary value per signup), then this may not be effective demand generation.

Here are some examples of conversion rates (you can see them broken down further in the report):

2. Event Rates.

Event rate takes into account how many goals were reached, contacts were made, customers were acquired, etc. For example, if 100 leads sign up for your offer, what’s the event rate? The answer is you’d need to know how many people opened the email or SMS , whether they filled out your contact form , what percentage of them purchased something , how many hours they spent on reading your blog posts, etc. All of these factors should be taken into account so you can realize the true value of your demand generation efforts.

3. Cost per Lead.

This is perhaps the most difficult metric to track, but it’s definitely the most important one to determine success with your campaign. Event rates are also key, as they will show you how responsive your target market is to your offer. 

For example, if you’re running a promotion for a new app that costs $199, what are the event rates? 

You’ll need to know how many people signed up for the free trial , what percentage of them actually purchased , how many hours they spent on reading your blog posts , etc. The goal here is to determine whether or not you’re getting a good value for each lead you generate.

  • Where to Get Started: MOZ

Now that we’ve discussed the three things you should be measuring, let’s talk about where to get started with measuring your campaign’s ROI. First, we recommend checking out our own platform, Moz.com . We’ve got several tools that help companies track and measure their demand generation campaigns:

  • Keyword Difficulty Tool

This free tool helps SEOs and marketers determine how competitive a particular term is. It also tells you how hard it would be to rank for specific keywords based on difficulty and monthly search volume.

  • Conversion Tracking

This tool tells you how many people convert on your website or app after they click on your sponsored link. You can also see how much revenue this produced for the campaign, as well as how long it took to generate these conversions.

  • Paid Search Ad Tool
  • This gives you an idea of what type of advertising is performing best in the Google Display Network (GDN). You can also check out other tools here – like Keyword Difficulty Tool – that will help you measure paid search performance.
  • Facebook Insights

This gives you a breakdown of your Facebook page’s performance in terms of reach and engagement. With Facebook Insights, you can also see how many people follow your page and how many fans your competitors have , which will help when measuring ROI .

  • Twitter Analytics

Similar to Facebook Insights, this lets you know how well your tweets are doing in terms of total impressions and engagement rate. This way, you can figure out what kinds of tweets (direct links vs. tweet text) are performing best for your campaign.

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