Which Marketing Channels Produce the Highest ROI for eCommerce?

Learn how to calculate your marketing ROI for eCommerce, as well as the best channels to use.

If you're an eCommerce business, you need to know which marketing channels will give you the highest return on your investment (ROI). In this post, we'll discuss how you can analyze the ROI from each channel, as well as some proven tips for maximizing your marketing channels.

How do you calculate your marketing ROI?

Marketing ROI is one of the most important metrics for any business to track and understand. It allows companies to see whether or not their investments are paying off, and if they need to make adjustments to their strategy.

Marketing ROI is calculated in a number of different ways, but the most common is by dividing the return from an investment in marketing by the cost of that investment. For example, if you spend $100 on marketing, you want it to generate at least $100 in sales — and ideally, much, much more than that. The average eCommerce marketing ROI is about $2.75 for every $1 spent.

For paid advertising, the formula for your marketing ROI is straightforward: your gain from your investment minus the cost of the investment, divided by the cost of your investment. If you spent $100 to generate $200, you’d find a 100% ROI using the formula.

Of course, the tricky part is adequately measuring your entire costs and your entire gains. Make sure you’re including any fees included with advertising, as well as the time it takes for you to do it. For some of the marketing channels that we’ll talk about below, the ROI gets tougher to measure because you have to factor in more time and effort versus only dollars.

Now that you know how to measure the ROI of your marketing efforts, here are some of the most effective marketing channels for eCommerce businesses.

Email Marketing

On average, for every $1 you put into email marketing, you get $36 out of it, according to recent studies. Said another way, email marketing really, really works for eCommerce businesses.

Most of your potential customers check their email multiple times a day. Sure, they may get a lot of emails but they still respond to ones that resonate with them. We’ve put together a list of 8 email marketing campaigns that will help your emails resonate with your shoppers.

Get the most out of your email marketing with SafeOpt

Email marketing is great, but you have to have your customer’s email to reach them. And we all know that many customers don’t sign into their store account while they’re browsing or before they abandon their shopping cart.

But, thanks to new tools like SafeOpt, you can expand the reach of your email marketing in a way that will delight customers and be fully compliant with email and privacy regulations.

After an eCommerce brand signs up for SafeOpt, it can send verified offers to customers who abandon their carts, even if they don’t have their email addresses in their databases. This is possible thanks to SafeOpt’s network of shoppers that have joined through publishing partners or through SafeOpt directly.

The ROI is practically guaranteed with SafeOpt because it works on a cost-per-acquisition model. You only pay for transactions that are generated from SafeOpt emails — meaning you only pay when shoppers buy from your store.

See how SafeOpt has helped brands of all kinds recover more than $100 million in lost revenue by requesting a SafeOpt demo.

Search Marketing

Some consider search marketing one of the best marketing channels ever invented because customers are telling you what they want whenever they search. Sure, they might not be ready to buy at that exact moment, but most other marketing channels are built around generating demand from customers versus having them tell you what they want.

For search marketing, you have Pay Per Click (PPC) and Search Engine Optimization (SEO). Let’s dive into these and see how you can use these to boost your revenues.

PPC

PPC is a form of advertising that allows you to have an ad at the top of search results. With PPC, advertisers pay only when their ads are clicked on. This means that they can spend less while still reaching their target audience.

Companies can use PPC campaigns to show ads on Google, Bing, and Yahoo search engine results pages (SERPs). They can also show these ads on other websites through Google Adwords or Bing Ads.

The benefits of using PPC for eCommerce include:

• Reach the right audience with less investment. These ads only show up on search queries that your audience searches themselves — it’s not shoved in their faces like a tv ad.
  
• Higher conversion rates. PPC ads typically have a higher conversion rate because the shopper has already shown purchasing intent by putting this into a search engine to begin with.
  
• Increased brand awareness. Even if they don’t click on your ad, they can start associating your brand with what they searched for.
  

Google is the dominant search engine and where the bulk of PPC dollars go. As such, Google has put together some great training courses on how to best master PPC for eCommerce businesses.

SEO

The goal of SEO for eCommerce is to improve the visibility and ranking of your online store in the search results. Think about it: when you’re searching for something, do you really scroll past the first few results? I didn’t think so — and neither do your shoppers.

That’s why SEO is vital for eCommerce. Some tips for improving your eCommerce SEO:

• Make sure your site speed is fast. Google and other search engines take site speed and overall site experience as a very serious factor in how it ranks sites.
  
• Write thoughtful product descriptions. You’ll want to include the basics about what it is and what it does, but also include things like who it’s good for and how it works.
  
• Make your URL structure easy for search engines to crawl. Have a sensible URL structure for every category and for your products.
  
• Use alt text for your images. Alt text is mainly built so that visually impaired people can better understand images on the web but it also has a benefit of boosting your SEO.

Unlike some of the other channels above, SEO takes time to work. That makes measuring the ROI of SEO a lot harder but it’s worth it.

Know your ROI for explosive growth

As we’re entering a time of economic uncertainty, successful eCommerce businesses can continue to thrive if they invest in high ROI marketing channels like SafeOpt, email marketing, and search marketing.

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