“Marketing!” you scream in exasperation because you know exactly how much you currently spend on marketing, but sometimes you feel like you’re simply organizing your money into a neat little pile and then setting it on fire. Calculating your ROI is an essential part of any business, but many don’t know how to do it when it comes to marketing efforts. This leads to a sense of loss, and before you know it you’re crying into a pile of ashes that was once your neat little pile of money.

When it comes to digital marketing, it’s entirely possible to calculate your ROI accurately. Because of the tools used by digital marketers, we can actually see exactly where money is being spent and what the results of your marketing efforts really are. But we’re getting ahead of ourselves. First thing’s first, we need to establish a baseline and to do that we need to measure where things are at.

What is a Baseline in Advertising?

It’s a starting point from which you can start running digital marketing campaigns and measure how they impact your sales, which in turn allows you to measure the ROI. Your newly established baseline is going to take into account your marketing efforts to date, your current site traffic, your current sales, etc.

As we’re talking specifically about digital marketing, your baseline needs to answer specific questions like:

• What kind of marketing efforts have already been made?
• How many people visit your website every month?
• How active are you on social media?
• Where do you advertise your business?
• Do you know how many clients and customers you’re getting from your different advertising channels?
• What’s the value of a customer/client? Long term/Short term?
• How many people do you have on your mailing list?

Most of this information can be garnered from your Google Analytics as this provides most of the digital data, including conversions (if setup), site traffic, marketing sources, and more.

Baseline Marketing – Why Is It Needed?

Before an effective marketing strategy can be created, there has to be a measurable starting point. That’s why the baseline is essential. It allows you to do two important things:

1) It’ll help you calculate the incremental effects of your marketing efforts. For example, maybe you’ll see a 75% increase in sales during your first quarter. Having a baseline means you’ll also be able to say that 52% of those sales were directly attributed to the new Google AdWords campaign you launched in February.

2) It’ll help you calculate the effects of external factors. With an established baseline, it makes it easier to explain why there was an unexpected dip in May and an increase in sales in August, even though the marketing budget remained the same.

How to establish a baseline? What Do I Do Once I Have My Baseline?

Once you’ve established where you are and the norm as it exists right now, you can start building a marketing strategy that includes specific campaigns. The results of these campaigns can then be measured against your baseline to determine the ROI and whether the campaign was effective or not.

One best practice method when deciding which campaigns to run first is to go for the low hanging fruit and work your way out. Already got a mailing list with a thousand people on it, why not start there? How about setting up a Google AdWords campaign to drive more dedicated and qualified traffic to your website so you can see results right away?

There’s a lot you can do once you’ve established where you’re starting from, and we could go on and on . . . but that’s for another article.

Want Help Establishing Your Baseline? We Can Help!

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Here’s how we want to make sure all our savvy clients are able to establish a baseline so you can accurately measure your ROI and see the value in your marketing efforts:

• Set up Google Analytics on your website
• Complete a Rank Assessment to see where you site ranks on Google search pages
• Provide a Monthly Analytics Report sent to your inbox every month