Digital marketing promotes products and services in diverse media formats such as social media, the internet, and the search engine. It helps to encourage businesses and attract many customers to the website, and social media platforms. 

Return On Investment(ROI)

It is a measure of the profitability of an investment and is typically expressed in percentages. The higher the ROI the more profitable the investment. It is used to compare the efficiency of several different investments. It is an essential tool for investors as it helps them make decisions about where to allocate their capital. 

Way to calculate ROI

There are several manners to estimate ROI but the most standard method of calculating it is 

ROI=(Net gain or Loss/ Initial Investment)100

Net gain or loss is calculated by deducting the initial investment from the final investment. 

For instance, If a company finances $2000 in stock and the value of stock increases by $2200, the net profit is 200 dollars. To calculate ROI $200 is divided by $2000 and multiplied by 100 resulting in an ROI of 20%. 

Several metrics can be used to evaluate the ROI of a digital marketing campaign

1. Conversion Rate: It is the percentage of individuals that are visiting your website and taking your preferred measure, such as buying a product, or filling out a form.

2. Bounce Rate: It is the rate of people visiting just one page of your website. 

3. Cost Per Acquisition: It can be figured out by dividing your marketing costs by the number of sales generated. Many Digital Marketers operate on a cost-per-acquisition model as they only pay for leads or sales based on set goals. 

4. Cost Per Rate: It is the percentage of visitors who clicks on the ad or link on your website. If a company knows its cost per rate then it enables them to know how its marketing actions are functioning and provides insight for creating further strategic and funding decisions. 

5. Average Order Value: Average order Value is a metric that allows marketers to hold the path of profits, and operate income boost. A slight increase in average order value can bring thousand of dollars. 

6. Return on Ad Spend (ROAS): Measuring ROAS helps businesses to know how well their ad campaign has gone. Digital Marketers can know how much money is spent and how much money they gain. Marketers work to the rule of having a 3X return on the investment. 

7. Engagement Rate: It is the total number of people engaging in the content by sharing and commenting on the content. 

Overall, these are the metrics which is used to evaluate the ROI of a digital marketing campaign. By tracking these metrics businesses can optimize their digital marketing techniques by expanding ROI.