Avi AryaFounder empowering agency founders to scale profitably

Hacks to estimate the ROI on Digital Marketing

1 Oct 2016

Watch on YouTube

This is a YouTube video titled "Hacks to estimate the ROI on Digital Marketing" containing a monologue or instructional talk from October 2016 explaining how to calculate digital marketing budgets and return on investment using conversion rates, cost per click, and average order value as key metrics.

How do I measure or calculate my digital marketing budgets? So, number one, you have to go with a few basic rules. There is a 10% conversion on leads. So if you're getting 50 clicks and there are five people who are coming and giving you leads, so you got five leads. Out of those five, about another 10% would convert. So you have 0.5 a lead which will convert only. So to convert one, you need 100 clicks so that 10 convert into leads and that one becomes a client. And so if the cost of a click is $1 and you spend $100 for 100 clicks, out of them 10 become leads, and out of them one convert that AOV, the average order value of that one product, if it is $50 or $100, then you're just about breaking even. But if the average order value is $500, you're selling expensive shoes or watches or whatever and your cost of acquisition of that customer is $100, you're making a 5x return. That is in basic steps. How you calculate the ROI on SAM.

More from Avi