I have worked on a number or projects where the ROI for online advertising exceeded 10 times the original investment in just 1 year. The chart below highlights various investments in Internet Marketing.
Online Advertising ROI
Pay per click can offer a 1o times return on gross revenues but declines over time. The reason for the decrease is a direct result of escalating costs for Pay per Click over time. Banner ads show little return in terms of lead generation but can be very effective in terms of marketing a company brand. E-Mail has a short tail and some nice return initially. However, ‘Natural’ or ‘Organic Search’ results provides the best return over time especially if partnered with Social Marketing. The return on effective Organic Search Marketing is substantial over four years if set-up effectively.
Recently, we completed a review on a company reselling used and new brand copiers in the Toronto market. An annual investment of $30,000 with both Pay per Click and SEO (organic search marketing) yielded a return of over $200,000 in the first year with forecasts exceeding $500,000 in year two.
Online advertising will be a key aspect to the growth of the companies today and in the near future. In the Canadian experience we find Canada has one of the highest broadband penetration rates in the world. More than half the adult population is on Facebook. Nearly 70% of Canadians watch videos online, while the average Internet user in Canada spends about 60 hours online a month. English-speaking Canadians aged 18 to 34 spend more than a third of their time online, more than they spend listening to radio, watching television or reading newspapers, according to the Interactive Advertising Bureau of Canada (IAB). Canadians are spending an increasing amount of time online and highly ROI online advertising dollars have not kept pace.
Although online advertising revenue quadrupled over the past five years to more than $1.6-billion in 2008, spending on digital advertising accounted for only 11% of the overall marketing budgets of Canadian companies, according to IAB.
In the United States, marketers spend as much as 14% of their overall budgets on online marketing, while the number is closer to 20% for Australia and as high as 23% in the United Kingdom.
