Which Digital Marketing Channels Have the Highest ROI?

According to eMarketer, digital advertising accounted for $455.30 billion in 2021. Digital ad spending was only projected to reach $188 billion in 2021. By 2022, digital ads make up nearly half of the total global advertising expenditures. In fact, digital ad spending is anticipated to increase more quickly than TV and radio.

The good news is that marketers have plenty of ways to reach consumers digitally. Digital marketing comes in various forms, such as email, mobile apps, display ads, video, etc. And there are dozens of companies offering those services. So how do you know what works best for your brand?

We examined the data from the most recent iteration of our annual Digital Ad Spend Forecast report to help answer this question. We used this information to identify the top 10 digital marketing channels across six categories: Search, Display, Social Media, Video, Mobile Apps, and Email.

We found that each category offers unique opportunities for brands looking to maximize their marketing budgets. Some channels work well for specific industries, while others offer a broader appeal.

Finally, we looked at the top channels based on their ability to generate leads. These channels generate qualified traffic because they attract people interested in your products or services.

Which digital marketing channels produce the highest ROI?

The digital marketing channels that drive the most traffic to your websites, such as search, social media, and paid ads, often have the highest return on investment (ROI). It’s important to remember that some sales-unrelated channels might still be quite valuable. For example, you might use Facebook Ads to reach people who aren’t already interested in your product. Or you could use Twitter to promote brand awareness, increase customer loyalty, and build relationships with influencers.

The best way to determine whether a channel offers good ROI is to measure how much money each one generates compared to the cost spent. If you see a high return on investment, you know you’re getting your money’s worth. You can even compare different channels side by side to find out where you’re spending too much or too little.

If you want to know what makes PPC such an effective marketing tool, look no further than the acronym itself. It stands for pay-per-click and represents a type of advertising that pays for every impression your ad appears on a search engine. This is different from display ads, where advertisers are charged based on how many people see their advertisements. In addition, PPC allows marketers to target specific keywords and phrases within a particular niche market. It’s also important to note that PPC can help businesses attract customers outside traditional channels like social media.

What is Pay-Per-Click Advertising (PPC)?

Why is PPC one of the highest ROI marketing channels?
Many people don’t realize that PPC stands for “pay per click.” It’s one of the most widely used forms of online advertising because it’s so economical. In fact, many small businesses start out with PPC campaigns. But it’s important to understand that PPC doesn’t work in isolation. You’ll want to ensure that your overall marketing strategy includes other channels, such as social media, email, and display ads.

Why is PPC one of the highest ROI marketing channels?

Pay-per-click (PPC) is one of the most cost-effective ways to generate leads online. While many businesses may hesitate to invest in PPC campaigns due to the high costs associated with running ads, there are several reasons why PPC is still worth considering. For starters, the conversion rates for PPC ads are typically much higher than those found in social media or display advertisements. In addition, PPC ads are highly targeted, meaning you can target specific keywords relevant to your product or service. Finally, PPC allows you to test different ad copy, landing pages, and offers without spending money upfront.

The average ROI for PPC is around $2 for every dollar spent. However, some studies show that the average ROI for PPC is closer to $8 for every dollar spent. This is primarily because PPC uses advanced targeting methods such as location, interest, and device to find customers interested in your offer. These types of features allow advertisers to reach a broader audience and increase conversions.

How is PPC ROI calculated?

The formula above is used to calculate return on investment (ROI). This calculation helps companies determine how much money they spend on advertising versus the revenue generated.

Let’s consider another scenario. Let’s imagine you spend $10,000 on PPC ads to boost sales of a specific product.

You see 10 leads come from those ads, and three convert into customers. Your ROI would be 30% since generating one sale took you $3,000.

This calculation assumes that your CPC equals your average monthly budget for PPC. If your CPC isn’t equal to your average monthly PPC budget, simply divide the total number of conversions by your average monthly budget.

Search Engine Optimization (SEO)

Why is SEO one of the marketing methods with the highest ROI?
The Digital Marketing Association recently conducted a study that found that SEO accounts for nearly $3 billion annually in online advertising spending. As a result, it is one of the most successful digital marketing platforms available. Now might be the perfect time to start if you haven’t already begun optimizing for SEO.

What is SEO?

Search Engine Optimization (SEO) improves a website’s performance across multiple online platforms, including social media sites, mobile apps, and search engines. A well-optimized website will rank better in search results, meaning more people will find your website while searching for what you offer.

SEO aims to increase visibility and attract visitors to your website. Ensure your website loads quickly, has relevant content, and has a responsive design, among other things. To evaluate the effectiveness of your website, you can utilize programs like Google Analytics and Screaming Frog.

Why is SEO one of the digital marketing methods with the highest ROI?

In recent years, SEO has become a go-to digital marketing channel for many businesses looking to generate leads and increase sales. But what makes SEO such a powerful tool? And why does it outperform paid advertising like Pay Per Click (PPC)? Here are some things that make SEO an excellent option for marketers looking for significant returns on their investments:

  1. SEO is Long Term Strategy – Unlike PPC, which requires ongoing management and monitoring, SEO is a long-term strategy for driving long-term revenue. This allows you to spend less money upfront and focus on growing your business over time.
  2. SEO Works Well For Every Stage Of The Buying Funnel – SEO dominates regarding which marketing channel produces the best return on investment. You can use SEO to reach potential buyers across the entire customer journey, including those at the top of the funnel and those at the bottom.
  3. SEO Generates More Traffic Than Paid Advertising – Organic traffic, which SEO generates via natural search, accounts for roughly 49% of total online visits. In comparison, paid ads account for just 19%.

How do you calculate SEO’s ROI?

You can calculate SEO’s ROI using the formula:- (Gain from Investment – Cost of Investment)/Cost of Investment.

Let’s say your site generates 20 sales per month from organic visitors, with each sale worth $200, leading to a total monthly revenue of $4,000. You’ve also invested in SEO services and dedicated around $1,500 per month for those services over one year.

In this example, your ROI would be 166%.

Suppose you know how much each of your leads is actually worth. In that case, you can calculate ROI regardless of whether your company uses a B2B model or is primarily focused on lead generation. For example, let’s say that each of your B2B customers is worth 10 thousand dollars. Your ROI would be calculated as follows:
– ((10,000 x 0.1666) – (1000 x 0.0166))/0.0166 166.5%

Email marketing

Why is email marketing one of the highest ROI marketing channels?
Email marketing is among the most effective ways to reach out to customers. In fact, it generates over $1 billion annually. And according to HubSpot, email marketing is still growing – even though people are switching to mobile devices.

The numbers speak for themselves. According to MailChimp, 90% of marketers use email marketing, and nearly half say they see a return on investment (ROI) of at least 5%.

But you don’t just want to send emails to anyone — you want to target specific audiences based on location, gender, age, interests, income level, etc. By segmenting your audience, you’ll increase the chances of reaching those interested in what you’re selling. You can also find out where your customers spend money and make sure you’re sending offers there.

Here are a few tips for selecting the correct list(s):

  • Find your customer base. You might already know your customers’ names and addresses if you sell products to consumers. But if you sell to businesses, you might need to do some research. For example, a local restaurant owner might have a mailing address, but she doesn’t necessarily know her customers’ names.
  • Look up demographics. An excellent place to start looking up demographic information is with census data. Census data includes household size, median income, education levels, occupation, and more.
  • Use social media lists. You can look at public profiles on Facebook, Instagram, Twitter, and LinkedIn to find potential leads.

What is email marketing?

Among the most efficient ways to contact clients and prospects is through email marketing. With it, you can nurture relationships, generate sales and increase revenue. In short, it helps businesses grow.

The key to successful email marketing is delivering relevant messages. This requires understanding what people want and how to provide those things to them. To do this effectively, marketers must know about their customers and prospects. They must understand customer interests, needs, and behaviors. And must develop strategies to address each person’s wants, conditions, and behaviors.

Why is email marketing one of the highest ROI digital marketing channels?

There are many reasons why email works well for businesses, including personalized messages, ease of implementation, and the ability to track conversions. However, despite its popularity, it still doesn’t receive enough attention from marketers. In fact, according to MarketingSherpa, just 28% of B2C brands send emails regularly.
But there’s good news: Email marketing can make you money when done correctly. A study by BrightEdge found that the average return on investment (ROI) for email campaigns is $44 per dollar spent. This figure includes both the cost of sending the email campaign and its benefit.

The study also revealed that email marketing outperforms social media marketing, mobile advertising, display ads, and paid search.

What can you do, then, to make your email marketing efforts better? The following suggestions can help you increase your ROI:

  • Focus on building relationships with customers. Your goal is to keep customers engaged over long periods. To achieve this, offer something unique and relevant to each individual customer. For example, if someone searches for “dog food,” chances are they’re looking for information about dog food. If you sell pet supplies, you may choose to include a discount code for a free bag of treats.
  • Use automation. Automation allows you to schedule and execute multiple tasks without manually checking off each task as completed. This helps minimize errors and ensure consistency throughout your organization.
  • Make sure your email copy is compelling. Studies show that people tend to open emails that contain compelling subject lines and body text. So focus on creating catchy headlines and informative paragraphs.

How do you calculate email marketing’s ROI?

Email marketing costs money. But it doesn’t always feel like it does. Suppose you’re spending hundreds of dollars per month on email campaigns. How do you know whether those efforts are actually paying off?

The answer lies in calculating return on investment (ROI). Simply put, ROI measures the amount gained from investing something versus the cost of investing. For example, say your business invests $1,000 to build an effective email campaign. After one year, the campaign generates $2,000 in revenue. Your ROI would be 2/1, or 200% — meaning you made $200 more than what you spent.

The same reasoning can be used to calculate email marketing ROI. Let’s say you spend $500 to build, launch, and maintain your email campaigns. Over 12 months, you receive three qualified leads, each worth $1,500. Your ROI would equal 3/1, or 300%, meaning you generated $300 more than what you invested.

Why aren’t traditional channels some of the highest ROI marketing channels?

Traditional media such as newspapers, magazines, radio stations, etc., have been around for decades, and many businesses still rely on them heavily. But today, there are alternatives that offer similar benefits without the high costs associated with traditional advertising.

For instance, digital platforms like Facebook and Instagram allow advertisers to target specific demographics based on age, gender, interests, location, income level, occupation, education level, relationship status, political affiliation, religion, sexual orientation, and much more. They also provide detailed analytics that helps companies understand their marketing efforts’ effectiveness.

But while these platforms have significant advantages over traditional media, they don’t come cheap. You’ll generally pay anywhere from $10-$100 per thousand impressions (CPM). This means that it doesn’t matter if a sale is made; you get charged upfront each time someone views your advertisement.

In addition, unlike traditional media, online platforms won’t necessarily deliver your ad to people who match your demographic profile. Instead, they’ll show your ad to everyone, including those who don’t fit your criteria.

This isn’t just a problem for small businesses; large corporations spend millions of dollars monthly on social media advertising. In fact, according to eMarketer, the average total spent on social media advertising increased by 50% in 2016 alone.

Leverage the best marketing strategies for ROI today

Digital marketing is one of the most effective ways to increase brand awareness, engage audiences, and ultimately drive revenue. But how can you pick from all the various channels? And once you make that choice, how do you measure success?

Working with me, I’ll break down the major components of each type of marketing strategy. This can include Search Engine Optimization, Pay-Per-Click Advertising, Email Marketing, Social Media Marketing, and much more. You’ll learn everything you need to know to determine whether those tactics are worth your money — and how to optimize your return on investment.

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About Brian Gibbs

Brian Gibbs, a San Antonio-based Digital Marketing Strategist, empowers local businesses with tailored AI and marketing solutions. Passionate about innovation and growth, he's your key to online success. Connect with Brian today.