What results can you expect from digital marketing?
As a digital marketing agency Contitude is, we are often asked by our clients what results to expect. In this blog post, we'll answer the question as thoroughly as we can.
Working with digital marketing
Digital marketing is broad and limited only by activities that can be carried out digitally. Examples of digital marketing include blogging for SEO, social media advertising, webinars, inbound marketing strategies, etc.
Sometimes it can sound like there is a "silver bullet" - a one-size-fits-all concept or strategy for digital marketing. However, at Contitude we believe that every business is unique and that certain marketing strategies and tactics are better or worse suited to some businesses.
The advantage of digital marketing is that you can test different hypotheses about what works and optimise them as you go along.
Estimate future results from digital marketing
Whatever the current situation and the type of business we meet, everyone wants an indication of what results they can expect from digital marketing. The maths isn't really that difficult but what is difficult are the variables.
Easily set up, it is possible to calculate in this way:
Expected traffic from all channels x expected conversion rate x value of an average conversion = expected result.
Expected traffic from all channels
Calculating expected traffic from all digital channels requires some work. It helps if there is a baseline of data that can be used as a starting point. Then it can be assumed that organic search without more work is constant and that any SEO work and blogging can increase the number of visits. If you really want to dive deep, it is possible to use SEO tools to check how many searches certain types of search terms have and the likelihood of ranking higher on those search terms as well as the distribution of clicks for different positions. Then you can come up with a formula that looks like this for each given search:
Number of searches on term Y per year x probability of ranking to position X x estimated click-through rate for position X = number of visits from term Y
Then do that calculation for all the search terms you plan to work with in addition to those already ranked. This calculation has quite a few uncertainties and there is also the time aspect of SEO which makes it difficult to estimate how quickly you can rank higher on a particular keyword. It can take 3-12 months to get to the position you will be in over time.
Estimating the number of visitors from SEM or social media ads is easier as you can control this more... It is possible to advertise through pay-per-click (PPC) where you pay per click on your ad. Although there are often auctions for PPC, it is possible to set a reasonable average PPC price which allows you to estimate the amount of traffic from paid channels based on the Ad Spend budget.
The amount of direct traffic is really hard to estimate but can often be estimated if there is historical data where internal traffic is filtered out as it will not help you reach your conversion goals.
In addition, you need to take into account organic traffic from social media and referrals. For some businesses this is significant and really hard to estimate, but for most this is so small that it doesn't need to be included in the calculations.
Once all the data sources have been compiled, it is possible to make a calculation that gives an indication of future visitors. However, there are many sources of error in this type of calculation and it becomes an educated guess at best.
Expected conversion rate
To calculate an expected conversion rate, it is possible to either assume that the conversion rate is fixed and will not change over time. This can be done if there is sufficient historical data available and targets are set. If this historical data is not available, it is possible to use an industry average for conversion rate. It will not be nearly as reliable and reality will never match your calculations but it can at least give a good indication.
Even if you have historical data, it may not be reliable and give a good indication of future conversions. If the plan is to work on conversion optimization or add more conversion points such as new products, new whitepapers, etc., the conversion rate will not be fixed but will change.
The value of an average conversion
The value of an average conversion can only be based on historical data. The calculation here looks like the following for B2B leads:
percentage of leads that lead to an appointment x percentage of appointments that lead to a deal x average lifetime value of a deal = value of an average conversionWe've made a lead value calculator for you to test.
For e-commerce, this value is simply the value of the average order.
Expected results from digital marketing
Once all variables are calculated, it is possible to estimate a future result from digital marketing. However, there are many uncertainties and the estimated conversion rate, which is usually around 2% - 0.5%, has an extremely large impact.
Therefore, we at Contitude do not usually provide estimates of future results. It's too much guesswork and rarely matches reality. Whether an estimate is on the high side or the low side, it will not be correct. There are many other factors beyond this simplified calculation that affect actual results.
The current situation affects the results of your marketing efforts
An important aspect of the expected results of marketing is the current situation. If you are just starting out in digital marketing and have not yet started building a website, you have a longer lead time to start seeing and measuring results. It is possible to influence the starting distance by working harder with PPC, for example, but this tends to be more costly and involve a longer time for ROI.
If you have been working with digital marketing for a longer period of time and have carried out several different types of activities such as blogging, SEM, social media ads, etc., you have probably already been able to see some results from your activities already now. In that case, it's more about developing and optimizing rather than creating something new. There you can already see results in the short term.
Data collection
One of the coolest things about digital marketing is that everything is measurable. This means that if you have set up measurement tools such as Google Analytics, Google Search Console, etc., it is easier to analyse and hypothesise about future results. In Google Analytics, you can set targets for lead conversion or e-commerce purchases, for example. If these types of goals are set, it is easy to calculate what conversion rate you have on your website today. It is also possible to find out which digital channel is generating the most conversions. This gives the best indication of what activities should be implemented.
B2C vs B2B
When it comes to talking about results, the type of company also has an impact. It is easier to measure results where there is a directly measurable end goal, such as an e-commerce business. There it is quick and easy to measure results in ROI or ROAS (return-on-ad-spend) etc. which is common in B2C.
Generally for B2B, leads are the closest metric to sales. This makes it more difficult to measure ROI or ROAS as there is no definitive business value for each lead once they become a lead. It is possible to calculate an average value of a lead but can sometimes be misleading as it is average. Here you can use our calculator to calculate an average value of a lead. In addition, sales processes tend to be relatively long for B2B, which means that an accurate ROI from, for example, a PPC campaign can take several years to calculate.
Sometimes market fit is not correct
It hurts but we've realised that sometimes it doesn't matter how much traffic or how good the conversion points are, sometimes market fit isn't right for some businesses. This is especially true for new companies with new services or products. Marketing can only do so much but if there are no people interested in buying a service or product then the results from marketing will not deliver. Some companies are so far ahead with their ideas that the market is not ready or the product is not good enough, regardless of what we at Contitude or the company itself think. Therefore, no one can ever guarantee results from digital marketing, not even us even if we wanted to.
Long-termism is important if you want to achieve results
As with most things, sustainability and persistence are important when it comes to marketing. The first campaigns that are implemented are unlikely to be successes. There are exceptions that prove the rule but most people need to see the first campaigns as learning experiences where it's about finding the right keywords, the right target audience or the right conversion point to successfully achieve the set or expected goals. Above all, working with SEO is all about the long term where results come over time. Then SEO is the most cost-effective way of working and provides many other benefits such as building trust. Trust is one of the key factors behind successful digital marketing as it requires trust for someone to dare to make a hard conversion. Trust is built primarily by showing your knowledge and sharing it through blogs or customer cases. But it requires you to look at things in a longer perspective. You don't gain trust in someone or in a company by reading one article, but by reading many articles over time. An example of this is statistics from River Pool and Spa in Virginia, which had an 80% close rate for leads that visited more than 30 pages on their website as opposed to 25% for the rest.
Summary
Expected results from digital marketing can be calculated according to the following formula.
Expected traffic from all channels x expected conversion rate x value of an average conversion = expected result.
There are many uncertainties behind each variable and it differs extremely from company to company depending on the current situation, what historical data is available and what industry the company is in.
You can't guarantee results when it comes to digital marketing. Even if the conditions are right, anything can happen.
What's important is to be long-term and have staying power when it comes to digital marketing. Building trust, educating and optimising based on data is best done over time.
If you want to get started with digital marketing, our Guide to Inbound Marketing is a great place to start.
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