What is the ROI for Digital Marketing?

As a growth stage entrepreneur, you’re constantly thinking about ways to grow your Company. Considering the world is more virtually connected than ever, with customers spending more and more time online, digital marketing is becoming a vital part of a robust business strategy. Which begs the question: what is the ROI for digital marketing?

At New Economy, it’s on our minds too.

Why, you ask? It aligns with our efforts of helping you gain control of your finances to make smart decisions to build and grow your Company. And to grow your business you are going to have to make favorable investments in marketing.

In this article, you will learn: 

  • What digital marketing is
  • What types of digital marketing channels you can invest in
  • Ways to calculate ROI for digital marketing strategies
  • 3 key takeaways related to investing in digital marketing and the ROI

Note, before getting into any digital marketing strategies it’s very important to understand who your target audience is and where they hang out.

Let’s dive in.

Digital Marketing & ROI

What is Digital Marketing?

Digital marketing is an umbrella term for all of your online marketing efforts. 

This can encompass the following:

  • Content marketing
  • Social media marketing
  • Pay-per-click advertising
  • Affiliate marketing
  • Native advertising
  • Mobile marketing 
  • Email marketing
  • Online PR
  • Inbound marketing
  • Sponsored content
  • Search engine optimization (SEO)

The best digital marketing strategies focus on specific audiences and support the overall business strategy. Today, consumers are relying on digital channels to discover, research, and purchase products and services. Therefore, investing in digital marketing and knowing the return on investment can be a good business decision.

A few interesting digital marketing statistics per Tomas Laurinavicius’s “Mind-blowing Digital Marketing ROI Statistics” are as follows:

  • The average return on investment (ROI) from email marketing stands at 4,200%
  • Individuals who use blogging as a marketing tool are 13 times more likely to get a positive ROI
  • 72% of marketers improve their engagement through content marketing
  • Companies generate an average of $2 in earnings for every $1 they spend on Google ads
  • 64% of internet users are more likely to purchase a product online after watching a video

Pretty interesting stats, right? 

There is no doubt that every company needs to have a marketing budget to help ensure that proper resources are allocated to meet the goals of the Company.

Here is a quick question for you to consider.

What digital marketing strategies are you currently investing in and how do you decide if you are investing enough?

On a monthly basis, New Economy is investing in email marketing, blogging, and content creation which is about 1% of our revenue. As we look forward to 2024 we are planning to increase that investment to 3-5% of our revenue. We still think this is a bit low and are continuing to reflect on whether or not this is enough to help us reach our goals.

Which Digital Marketing Channels Should You Invest In?

Unfortunately, there is no broad-based answer to this question.

As we mentioned earlier, you need a thorough understanding of your target audience. For instance:

  • Who are you trying to reach?
  • What is their communication style and preference?
  • What content do they enjoy most?
  • Which digital marketing channels do they use?

It is worth taking the time to answer the above questions as it will save you time and money in the long run.

At New Economy, we have learned a lot about our ideal customers and where they hang out. So we will speak to those digital marketing channels and why we are investing in them.

Content Marketing 

We believe content marketing is the foundation of our digital marketing strategies. Through content creation, we aim to capture attention and then nurture that interest with email marketing (which we describe below).

Our content marketing takes the form of blogs, videos, one-pagers, client case studies, and social media posts. The key is to create high-quality content that adds value to your targeted customer.

Click here for an example of the client case study. Here we identified issues and challenges that the client was facing and discussed how we were able to help them to go from a place of frustration and chaos around their financial situation to a place of confidence.

Email Marketing 

Even though we get tons and tons of emails, email marketing typically delivers one of the highest returns on investment (ROI). We are about to launch our weekly email marketing campaign with the idea of trying to educate our customers and prospects. Our intention is to build the relationship and establish trust and credibility. 

The end goal is to get our prospects to our website and ultimately generate a conversion via our “call to action button”. Here, we are taking a long-term approach by trying to capture attention and create interest over time.

Social Media Marketing

Here is a staggering statistic: 70% of Americans utilize social media. 

Therefore, this has become a powerful digital marketing tool for growth-stage entrepreneurs. Each social media channel caters to a different audience so it is important to know who your audience is and where they hang out. 

Our focus here is to build relationships with key people at targeted companies. We do this with an educational and informative content style and spend much of our time on LinkedIn, YouTube, and Facebook. 

As we seek to improve our digital marketing strategies, we base our decision on data and not assumptions. So how do we calculate the return on investment (ROI) for our digital marketing strategies?

Keep reading 🙂


How Do You Calculate the ROI for Digital Marketing Channels?

Let’s continue on with the digital marketing channels noted above to calculate the return on investment (ROI) using New Economy as a guide.

Content Marketing 

When a Company doesn’t have time or bandwidth to produce its own content, it might outsource its content creation. While staffing someone outside of your office will cost your company money, think of the extra hours your team will have for other productive projects if they don’t have to create content.


New Economy wants to publish 8 social media posts and 2 blog posts per month. In order to do this it will take some investment in labor and technology.

They use this formula to calculate their ROI:

Internal Cost

15 hours per month x $150 per hour =    $2,250

Technology Costs                              =    $500

Total Monthly Cost                            =    $2,750

External Cost

Marketing Firm Retainer                   =    $1,200

By outsourcing to an external marketing firm, we are realizing a gain. The outsourced firm is able to do this much more cost-effectively. However, the true benefit is the recapture of time under the Opportunity cost. By spending 15 fewer hours on marketing, we are able to spend time on direct sales which could result in a new client and add $36,000 to revenue.

In addition, we look at the ROI through a different lens. If we spend $14,400 ($1,200 x 12 mth) on outsourcing our marketing efforts and get 2 new clients, that’s an additional $72,000 in revenue. This results in a return of $57,600 or 407% return on investment; we will take that.

Email Marketing

Email marketing is a great way to nurture current leads. It provides value and establishes you as a thought leader. We currently spend about 2 hours per week or 8 hours per month on creating our email marketing campaigns.


New Economy wants to publish 4 email newsletters per month. In order to do this it will take some investment in labor and technology.

They use this formula to calculate their ROI:

Internal Cost

8 hours per month x $150 per hour   =    $1,200

Technology Costs                              =    $50

Total Monthly Cost                            =    $1,250

If we spend $15,000 ($1,250 x 12 mth) on outsourcing our marketing efforts that results in 2 new clients for an additional $72,000 in revenue which is a return of $57,000 or 380% return on investment; We will take that.

There is an old saying. It takes money to make money. 

We believe that digital marketing has a pretty big upside. There are ways to identify the right strategies and then determine if they are generating returns for your business.

So take a look at your profit and loss statement and review your marketing line items. What type of ROI are they generating for your business?

3 Key Takeaways Related to Digital Marketing and Calculating Your ROI

If you want to build and grow your business, you need to make sure you are properly budgeting for digital marketing. Further, you should continuously evolve the return on these investments (ROI).

Here are three key takeaways related to calculating your ROI on digital marketing:

  1. Make sure you have done the hard work of understanding who you are and who your customer is. If you have not done this work, you are wasting your time and money on digital marketing. For real.
  2. Expect a positive return on your investment. We believe it is reasonable to expect a positive ROI over the long term. After all, if they don’t generate a positive ROI, why would we do them? So get serious about your investments and calculate the returns on a quarterly basis.
  3. Realize that digital marketing investments do not operate on a stand-alone basis. This can make calculating the exact ROI for any specific investment difficult but it is worth pursuing. We strive for “reasonable and accurate enough” to make smart decisions based on data.

Digital Marketing & ROI

New Economy Team Members are Experts in Accounting for Entrepreneurs

If calculating returns on investments isn’t your thing, you struggle with building budgets that properly allocate funds, or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner

We’ll help you get your accounting done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.