Most restaurant owners/managers think of digital media as a lost cause that needs to be undertaken due to the prevalent trend for restaurants to have some kind of an online presence even if it is only to meet customer expectations. 

The main reason behind this perception is that restaurant owners managers are just not interested in engagement rate and follower growth on social media. They want to see results, and not everything you do on digital media translates directly into dollars and cents. This is further complicated by the fact that measuring returns on metrics such as engagement rate or follower growth often feels like a guessing game. In fact, 55% of digital marketers cited measuring ROI as their number one challenge. 

That’s why we put together this guide to help you measure ROI from your Digital Marketing Campaigns based on your unique offerings.

What is Digital Media ROI?

In simple terms Return on investment is the return generated  from the time, and resources invested in your  digital strategy. The most basic Digital Media ROI formula appears as follows:

Profit / Investment x 100 = Digital media ROI %

Profit – the money you’ve earned from your digital media marketing efforts
Investment – the total cost of your digital media marketing efforts

Now imagine you are running a restaurant and you made a total sale of $100 on a particular day after removing  all expenses including food, labor and marketing and overheads if you make a profit of $25 then your ROI is calculated as $100- $75 /100*100 = 25% Looks easy enough? But, in terms of digital media marketing, how do you apply this concept? While it’s easy to apply this formula to calculate your monetary profit, things get more complicated when your investments bring intangible results.

Why is it important to measure ROI From Your Digital Marketing Campaigns?

There are a number of reasons why measuring social media ROI should be a priority in your business.

  • Demonstrate the value of digital marketing to your client
  • Prove that your digital marketing strategies are effective 
  • Identify activities are yielding the best results,  For example, if you discover       that  posting stories on Instagram or running Facebook contests generates more  momentum on specific days, resulting in increased conversions on online offers for the restaurant, you can shift more budget towards them.
  • Single out strategies that aren’t working and optimize them.
  • Justify digital media budget requirements 

How To Measure ROI From Your Digital Marketing Campaigns?

Step-1: Identify Your Goals

When we think “ROI,” we often think about cash returns, however, it may not always be the case. 

Let’s say for a restaurant client, who has just opened shop, brand awareness and reach are as important as guests walking in the door. The digital marketing strategy in the first few months of restaurant operation should be focussed as much towards brand awareness as footfall or the calculation of ROI in this case will be different from that of an older enterprise which is mainly focussed towards generating additional revenues.

The first step in calculation of ROI is therefore, determining the goals. 

As any digital activity may take some time to show results, you may want to talk to your restaurant client and settle on quarterly reports. Talk to your restaurant client and lay down 2-3 specific goals they would like to achieve within a quarter.

Marketing objectives are your broad aims and can include things like

  • Brand Awareness 
  • Better Reach and Visibility
  • Increasing Repeat Visits 
  • Increasing Average Order Size 
  • Increasing Online Orders
  • Build Customer Loyalty

Step-2: Set Smart Goals And Arrange Them In Order Of Priority

To determine the ROI, you need a data-driven end-game.

Set measurable and realistic goals. When you attach numbers and deadlines to these objectives, they become specific, measurable and achievable goals. Setting SMART Goals not only allows you to focus your efforts and  time but also helps you allocate your budget efficiently to maximize returns.

Let us understand this with the help of an example: 

Let’s say your broad objective is to increase Average Order Value. Now you come up with some combo-offers to increase the order size or you offer a discount on orders above a certain amount( which is higher than the current average order value). Then you come up with strategies to promote these offers/discounts.

Strategies
  • Email Marketing
  • Sms/Text promotions
  • Ads
  • Organic social Media

Create measurable Goals(KPIs) for  each  the above strategies. These KPIs should be campaign-specific.

StrategyKPIKPIKPI
Email MarketingOpen RateClick RateConversion
SMS marketingOpen RateClick RateConversion
AdsReachClick RateConversion
Organic Social MediaReachClick RateConversion

All the KPIs listed in the above table are based on someone taking a measurable action that can be tracked. 

This is not to undermine the importance of metrics like social shares, followers and general reach but they should not be your main goals unless you’re focused solely on brand awareness.

3. Track Your KPIs

Now that your goals are defined, the next step is to track them.  In the above example, let us see how you can track each goal separately-

a. Email Marketing

  1. You will get the open rate and click rate from your email service provider. The next step is track down conversions. Take down the list of people who clicked on your campaign and import the list to an excel file.
  2. Get access to order data from your restaurant client- ( you can get this data easily from the  POS) 
  3. Now, you simply have to run the match function on excel to see which one of the people who clicked on your campaign email finally went ahead and ordered.

Track the ROI of your Email campaigns using Google Analytics

Ensure that the restaurant website has Google Analytics tracking installed site-wide including the order online page. To track conversions special UTM parameters are appended to URLs to identify traffic sources. UTM parameters for email link tracking should be defined at campaign level. Each of your campaigns should have a separate UTM link for the Call To Action. For instance, in this campaign we have created a UTM link for the Order Online Page (refer pics below) using the CAMPAIGN NAME- ORDER ONLINE. Say you run another campaign to promote say a 10% off offer- to differentiate between the campaign while tracking on Google Analytics, you should have a different CAMPAIGN NAME, something like say, “percentage discount”.

Measure ROI From Your Digital Marketing Campaigns- UTM Parameters

Utm parameters are generally used in 2 ways:

1. Several marketing platforms automatically connect to GA by adding utm parameters to campaign links

2. Marketers can define utm parameters by adding relevant values.

Measure ROI From Your Digital Marketing Campaigns- How to set up UTM parameters manually

How To Integrate Your Email Marketing Platform To Google Analytics

All email marketing platforms do not support custom tracking with UTM parameters for Google Analytics by default, you may have to ensure that link tracking is enabled by integrating the email marketing platform to Google Analytics. Here are some useful links for popular email service providers.

Follow these steps to integrate Google Analytics with MailChimp

Connect Constant Contact with Google Analytics

Integrating AWeber with Google Analytics

Where To Track Email Campaigns in Google Analytics

You can map conversions on your website pages (using URLs tagged with utm parameters) in Google Analytics.  by going 

Acquisition→ Overview →All Traffic → Source/Medium

Refer to image below-

Measure ROI From Your Digital Marketing Campaigns-

To get a dollar value of the conversion- you will need to set up the $ value of goal completion.  Say you are offering $5 off on a spend of $30 so each order placed is generating a revenue of minimum $30, so you can set the $30 as the goal completion value. (This is not the exact dollar value of revenues generated from this offers as some orders may be more that $30 but it will be a close approximation) 

Creating A Goal

a. Admin → Goals →Create New Goal

Measure ROI From Your Digital Marketing Campaigns-
Measure ROI From Your Digital Marketing Campaigns-

Create a destination Goal using the thank you page of your Online Ordering Platform as the destination URl. Refer Image Below.

Measure ROI From Your Digital Marketing Campaigns-

b. SMS Marketing

  1. You will get the open rate and click rate from your sms service provider. The next step is track down conversions. Take down the list of people who clicked on your campaign and import the list to an excel file.
  2. Get access to order data from your restaurant client- ( you can get this data easily from the  POS) 
  3. Now, you simply have to run the match function on excel to see which one of your people who clicked on the email finally went ahead and ordered.

Track the ROI of your SMS campaigns using Google Analytics

You can also track conversions from SMS campaigns by using Google Analytics. Set up custom utm parameter for your SMS campaign just like you shown above for Email campaigns.

In Google Analytics, there are pre-defined channels or traffic sources: organic search, paid search, display, direct, referral, social, email, and other. All you need to do to track SMS campaigns is to add SMS as a default channel to this group. Follow the steps below:

1. Click on Admin in the lower left corner on Google Analytics Dashboard and click on Channel Settings > Channel Grouping  on the far right panel.

Measure ROI From Your Digital Marketing Campaigns-

2. Click on the ‘Default Channel Grouping’ link

Measure ROI From Your Digital Marketing Campaigns-

3. Select “Define a new channel” and name it “SMS”.  

Under “Define rules” select “Source / Medium” and “contains” then enter “SMS” in the empty field next to it and click on Done. Save Your Settings by clicking on the save button at the bottom the page.

Your default channels will now also include the SMS channel, making it simpler for you to see the number of visitors who came from your text message marketing campaigns.

c. Ads and Organic Social media

If you are running ads to promote an offer again you have two ways to track ad conversion

  1. Set up an ad for the offer using a specific coupon code
  2. Create the code for offer redemption on your client’s POS
  3. Track coupon redemption and revenues generated from these orders.

The advantage of using this method is that you get exact dollar value for orders generated through your ads. However, on the flip side you cannot differentiate between the orders generated from organic social media posts and those who clicked through ads. Unless, of course you use two separate coupon codes to promote the same offer – (one code for ads and one for organic posts)

If you are struggling with advertising your restaurant on Facebook, you can refer to these guides below:

A Beginner’s Guide To advertising On Facebook

How To Create Retargeting Ads On Facebook

Hyper Local Advertising On Google And Facebook

How To Run Successful Facebook Ads On A Small Budget

Tracking Ad Conversion through GA

By using Google Analytics it is not possible to know the exact dollar value of revenues generated but it is possible to differentiate between organic and ad traffic. Let us see how; You can map conversions on your website pages (using URLs tagged with utm parameters) in Google Analytics by going to

Acquisition→ Overview →All Traffic → Source/Medium

However, this traffic is not strictly from the Facebook ads you are running. It also includes that is clicking on your Organic Facebook posts. You’ll need to separate the traffic between Facebook ads and organic posts by using separate UTM parameters.

Manually Create a Trackable Link

Create an UTM link for the order online page that you will use exclusively for your ads. Inside Google’s URL Builder add your site address- of your order online page.

  • Campaign Source: Social Media
  • Campaign Medium ; Ads
  • Campaign Name: Enter any name that can help you remember the campaign
  • Campaign Term: Name of offer or anything that helps you remember the campaign

Click on convert URL to Short Link to get a short UTM Link that you can use in Your ads. Now, if anybody clicks on your ad and places an order on your website you can see those conversions on Google Analytics. The data can be seen in Google Analytics by Source/Medium (“Facebook / Ads”) or by Campaign Name.

Compute Total Returns

Sum up the returns from all campaigns that you run in any given quarter to get the total returns.

3. Calculate Costs

Costs would include 

  • Your fee as digital marketing agency
  • Ad costs: This is fairly easy to track as you set up your ad budget.
  • The dollar value of discounts offered

4. Calculate Your ROI

Once you have your expenses calculated, you’ll be able to calculate your social media ROI for every campaign with this simple formula:

(Earnings – Costs) x 100 / Costs

You can also determine the specific ROI for each social network/ strategy by segregating your earnings and costs channel-wise using that same formula above. This will help you decide which channels are yielding higher returns and optimizing your strategy accordingly.

Wrap Up:

Determining the ROI from your Digital media marketing campaigns is important to showcase results for your clients. The bottom line is a data-drive approach to marketing. 

If you need help with any of the above steps.

  • Setting Up Google Analytics
  • Adding Google Analytics Code to your website
  • Tracking Your ROI manually
  • Setting up UTM Parameters 

Please feel free to reach out to us.

Until then, keep tracking and analyzing!