These days, the possibilities for marketing seem endless, as the internet has opened up entirely new channels that anyone attending business school twenty years ago wouldn’t be able to imagine. But as new digital marketing avenues compete with traditional tried and true advertising tactics, and business owners are faced with limited resources and almost unlimited marketing opportunities, everyone is asking the same question.
What’s the real return on investment (ROI) for some of the biggest marketing channels out there? And which channels are worth pursuing for business owners who have to be careful with every dollar they spend? Here’s an infographic that breaks down the ROI of some of today’s most common marketing channels.
Marketing Channels in More Detail
While direct mail may seem like an antiquated advertising channel, there’s a lot of power in this marketing technique, and ROI numbers are surprisingly high even when compared to digital alternatives. Direct mail is comprised of mailers delivered the old fashioned way, straight to the mailbox, and can take the form of catalogues, pamphlets, letters, or any other targeted marketing push delivered through mail. The response rate for highly targeted direct mail campaigns is 4.4%, compared to only .12% for similar email campaigns. In 2014, direct mail had a high ROI as well as a high response rate, with each dollar spent in direct mail campaigns generating $12.61 in revenue.
While Email does have a much lower response rate than traditional direct mailing techniques, it also has a somewhat higher ROI based on the fact that email campaigns usually have very small investment levels compared to direct mail. Email marketing looks a lot like direct mailing as far as campaign tactics go, but delivers a very different product, with marketing materials landing in a potential customers online inbox rather than brick and mortar mail box. For commercial email marketing campaigns, every dollar spent yielded $36.70 in revenue.
While social networking is still a very quickly evolving and underdeveloped marketing channel, initial data about ROI and Social Media helps prove that the medium has enormous potential for advertisers. On big social networking sites like Twitter and Facebook, users can create their own ad campaigns very quickly and easily, and have their ads displayed to the site users. For 2014, every dollar invested in social network marketing yielded a return of $13.02 dollars, according to the Direct Marketing Association..
Pay per Click
While many companies are choosing to invest in social media and other more modern advertising techniques where the web is concerned, “pay per click” display marketing still sports a good ROI and has a lot of benefits over other marketing channels. In “pay per click” advertising, a business’s marketing information is displayed on a site, and the business owner pays a fee based on how many “clicks” that information generates. ROI for display based PPC advertising in 2014 was $19.21 for each dollar invested.
Business owners can also invest in PPC ads in search engines as well, and run text based ads that target customers based on what they are searching for. This form of PPC ad can have a much higher investment threshold, as search engines allow advertisers to bid on placements depending on what keywords are searched for. The ROI of text based, search generated PPC ads in 2014 was $21.93 for each dollar invested.
Search Engine Optimization
If you are hoping that your customers will come to you, and that your marketing efforts will only bring in customers who are genuinely interested in the product you are selling, Search Engine Optimization (or SEO) may be a good advertising channel to invest in. SEO works by making sure that your website has everything it needs to land high on the results pages of search engines, meaning that when people look for a specific product or service, they will land on your pages more quickly. While SEO campaigns can take some serious and long term investment, the ROI is fairly high: $21.93 in revenue generated for every dollar invested in 2014.
While telephone marketing appears to have a much lower ROI than some of the other marketing channels listed above, it should be noted that telephone based advertising has never had a high ROI as a strength. Instead, some companies still turn to telephone marketing because the practice helps you expose your product to huge new markets, and can lead to brand new customers and leads. In 2014, every dollar spent generated $8.29 in revenue.
Direct Response Television, Radio, Magazine, and Newspaper
While all four of these marketing channels are unique and offer distinct benefits, they all perform lower than most of the other techniques listed above, with lower rates of return. Direct Response TV, which is familiar to most customers in the form of “info-mercials” and “call now” T.V. offers, brought in $6.48 per dollar invested in 2014. Direct Response radio, with “call now” style advertisements hoping to lure in customers, brought in $8.09. Direct Response Magazine and Newspaper marketing saw higher ROI, albeit with usually higher investment thresholds, with $10.06 and $11.98 generated per dollar invested, respectively.
For more information, contact our friendly and knowledgeable staff at Ballantine today!
I'm the Director of Digital Services and Partner at Ballantine, a family-owned and operated direct mail & digital marketing company based in New Jersey. and started in 1966 by my great uncle!