Digital advertising ROI for B2B small business

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Digital advertising ROI for B2B small business.

ROI versus other metrics

One way to determine the success of any B2B small business digital advertising campaign is measuring the campaign return on investment over a period of time.

There are so many variables that can be measured in a digital advertising campaign, but in this article we will review what we consider to be the most important and relevant variable which is the return on investment or the revenue on investment, either one of these.

The digital advertising campaign strategy for any B2B small business consist essentially in positioning the company at the first page of Google search results. This strategy will produce the necessary amount of leads which at the end will produce the desired revenues.

 

Digital Advertising
Digital Advertising

 

Google AdWords and Google SEO

To calculate the digital advertising campaign investment we will assume that there will be two types of campaigns to position the B2B small business at the first page of Google search results. One campaign will be Google AdWords search campaign, and the other campaign will be Google SEO campaign.

The digital advertising campaign will position the B2B small business at the first page of Google search results in both places, the paid ads place and the organic search results place.

Before we begin the math to estimate the campaign ROI, it is relevant to comment on what Google consider to be the ROI of any first page of Google campaign. You can see Google math in the following link:

https://economicimpact.google.com/about/#/?sections_activeEl=methodology

Google says that for every USD $ 1 invested in Google AdWords search, the business will get USD $ 8 return as long as the business is also in the first page organic search results . For Google the ROI is 8X. Google mention the word return, but according to the published information in the above link, it seems to be sales or revenues and not return (profit), so it is sales on investment or revenue on investment, more than return on investment. Even though return on investment is not the same as revenue on investment, because return means profit (sales – cost of sales), and revenues means sales, for the purpose of this article, we will consider ROI as revenue on investment, even though it might be return.

Let´s do the math

Let’s estimate the digital advertising campaign investment first and then we will estimate the digital advertising revenue or sales, so with both numbers then we will be able to estimate revenues on investment or ROI, for this article.

For the purpose of this exercise we will use the metrics of a similar campaign that we executed during 2014 to one of our B2B small business customer.

Digital advertising campaign investment for a B2B small business to be at the first page of Google search results

Campaign type Investment in USD $ per month Investment in USD $ per Year
Google AdWords 3,000 36,000
Google SEO 3,000 36,000
Total Investment 6,000 72,000

 

Digital advertising campaign leads generation for a B2B small business from being at the first page of Google search results:

Campaign type Number of leads per day Number of leads per year Conversion rate in % Number of new customer per year
Google AdWords 1 250 5 12
Google SEO 1 250 5 12
Total 2 500 5 24

 

Digital advertising campaign revenues generation for a B2B small business  from being at the first page of Google search results:

Campaign type Number of new customers per year Sales per project per year in USD $ Total sales per year in USD $
Google AdWords 12 20,000 240,000
Google SEO 12 20,000 240,000
Total 24 20,000 480,000

 

Digital advertising campaign return on investment for a B2B small business  from being at the first page of Google search results:

Campaign type Total sales per year in USD $ Total Investment per year in USD $ Return (sales) on Investment in times (ROI)
Google AdWords 240,000 36,000 6.67 X
Google SEO 240,000 36,000 6.67 X
Total 480,000 72,000 6.67 X

 

As we can see as per Google estimations the revenue (sales) on investment for a first page of Google search results campaign is 8X and for our example it is 6.67X. In any case we have demonstrated here that it is a good investment for a B2B small business to invest in a digital advertising “first page of Google search result” campaign, both paid and organic. These numbers can be increased by increasing the conversion rate which is estimated in 5% for this exercise.

Following a video on Google AdWords ROI:

 

 

Thanks for reading and thank for sharing. We will see you in the next article.

Is your small business executing a Google AdWords campaign? Is your small business executing a Google SEO campaign? Is your small business at the first page of Google search results?

This article was written by Julio Sanoja Rial, CEO & Founder of LeAds, a digital advertising agency that you can visit at www.msalesleads.com

You can read our previous article in the following link:

http://www.msalesleads.com/online-marketing-and-how-to-price-seo-projects/