What Is a Typical Average Online Marketing ROI in E-Commerce?

In the field of E-commerce, ROI (Return On Investment) is a metric used to determine the efficiency of a business initiative. ROI is usually defined as the profit (or loss) generated by an action or program, expressed as a percentage of the investment applied for that action or program. In other words, it’s the amount of profit (or loss) generated by a marketing effort relative to the amount of investment applied for that effort.

Why Is ROI Important In E-Commerce?

In essence, the purpose of marketing is to create a desire for a product or service among the public. The public then uses this desire to fuel purchase considerations, leading to action by the consumer. Thus, it’s imperative to accurately measure the success of any marketing campaign to determine its ROI (Return On Investment). Knowing the average ROI of an online marketing campaign in E-commerce will help business leaders optimize their marketing spend and assess the overall success of their online marketing efforts.

What Is The Average Online Marketing ROI In E-Commerce?

While there are no exact numbers available, it is known that the average online marketing ROI in E-commerce is somewhere between 3% and 7%. The efficiency of an online marketing campaign heavily depends on many factors, including the type of marketing activity carried out and the effectiveness of that activity. When considering the average online marketing ROI in E-commerce, you must also take into account the typical sales funnel, which can be heavily influenced by numerous internal and external factors. The following sections review the most important of these factors and how you can use them to improve your online marketing campaigns’ efficiency.

The Buyer’s Journey Is Everything

As discussed on Page 9 of the 2019 Marketing Scorecard by HubSpot, “The buyer’s journey is now longer than ever before. Across all industries, customers are increasingly researching products and prices online before buying in stores. That means marketing efforts need to reflect this behavior. While SEO has traditionally been used to attract traffic to a website, in today’s digital world, SEO is just as important as SEO was in the pre-digital era – it’s just different.””

The way customers discover, research, and then buy quality products and services in today’s digital world is different than it was in the past. This is because of the wide array of devices (such as desktops, tablets, and cell phones) and the incredible array of digital marketing tools (like SEO, PPC, and content marketing) that entrepreneurs and businesses can use to reach customers.

Marketing To Gen-Z Consumers Triggers A Different Kind Of Behavior

As a business owner, marketer, or entrepreneur, you must consider the fact that Gen-Z consumers are vastly different than Millennials or the general population. Much has been written about the Generation Z segment, and while much of it is positive (leading many to believe that Gen-Z are the future of marketing), it is still important to consider their distinct habits and behaviors when developing marketing strategies and tactics.

First, as entrepreneurs, the members of Generation Z are highly likely to be independent and driven by a desire to create business success and wealth. Additionally, Gen-Z are more open and willing to try new things than previous generations. As a result, if you want to have a successful business, you must be willing to adapt your marketing strategy and tactics to appeal to this particular audience.

Make Sure Your Marketing Is Actually Getting Results

To determine the efficiency of an online marketing campaign, you must look to the metrics that measure results. The type of metrics you should use depend on which aspect of marketing you are evaluating (e.g., sales or leads).

While there are many complex metrics that you could use, the most basic measurement of online marketing activity is website traffic, either direct or indirect. When considering website traffic as a measurement of the efficiency of an online marketing campaign, you must remember to look at both the volume and the quality of this traffic. For example, if you’re trying to increase sales of women’s handbags, you might want to concentrate your efforts on fashion blogs that have a large female audience. Alternatively, you could target male-focused blogs that have a large audience.

In addition to website traffic, you should also look at the number of email subscribers that you have attracted (either directly or indirectly through a linked social media account) as well as the number of people that have shown interest in your product or service (e.g., via the click-through rate on an SEO-optimized PPC ad).

Product Awareness

To begin with, you must consider the concept of product awareness. Simply put, product awareness is the knowledge a customer has about a product or service before they purchase that product or service.

In a highly efficient and effective marketing campaign, you would want to ensure that your target audience is aware of your product, its features, and what it can do for them. This is extremely important because the more they know about your product or service, the more likely they are to be interested in purchasing it. The more familiar your target audience is with your product or service, the more likely they will be to buy it. In most cases, this is a form of conditioning, which is the process of gradually teaching an audience to associate a particular behavior or activity with a reward or benefit.

To increase product awareness and ultimately drive sales, you could carry out numerous types of marketing, including branding, advertising, and PR. With branding, you could try to convince customers that your product is the best in its class by demonstrating its superior quality through marketing materials like web content and social media posts. Advertising, on the other hand, is much more efficient when considered as part of a marketing campaign. This type of marketing is usually focused on attracting customers toward your product through various platforms (e.g., social media).

What is important to consider about advertising is that you must measure its impact and analyze the results of your efforts before and after you implement a new marketing strategy or tactic. With PR, you could try to convince journalists and bloggers that your product is something special by providing them with material that helps them write about your product. In many cases, this type of marketing is free but has the limitation of being one-way (i.e., it reaches only those who are already familiar with your product or service).

Customer-Centricity

As a business owner, marketer, or entrepreneur, it is extremely important to you and your company that your customers are satisfied with your product or service. To ensure this, you must carry out customer-centric research and develop strategies and tactics that are in line with these findings. Doing so will make your customers enjoy your product or service and encourage them to continue using it or being associated with it.

To begin with, you must consider the concept of customer-centricity. Simply put, customer-centricity is the idea that an organization’s primary goal should be to satisfy their customers (and potential new customers) above all else.

In practice, this means that you and your staff must always put the needs and desires of your customers ahead of your company’s needs. For example, if you have a small business that sells high-quality handbags and bags, you might want to send out a survey to your customers to find out what they want and need in a handbag. Once you have established this need, you can then design a high-quality bag that meets these needs.

Long-Tail Vs. Short-Tail Thinking

Another important metric to consider when assessing the efficiency of an online marketing campaign is its distribution strategy. This refers to the process of drawing in as many potential customers as possible and then convincing these individuals to purchase your product or service. While there are many approaches to carrying out this type of marketing, it often involves attracting people toward your product or service via long-tail keywords (e.g., “high-quality” or “affordable luxury goods”) rather than focusing on a few high-volume keywords (e.g., “handbags”).

As a general rule of thumb, try to avoid using broad keywords (e.g., “luxury goods”) as these will attract a lot of traffic but may not be very specific or relevant to your product or service.