How to determine ROI?

From my experience as a digital media consultant and account manager, most small to medium sized businesses/enterprises (SMBs/SMEs) 'waste' their online marketing dollars because they are unable to 'capture leads'. I deal with clients on a regular basis complaining about online marketing strategy with XYZ company not generating into enough click-throughs to their website and/or phone-based inquiries.

These clients usually call us after receiving their monthly bank/credit card statement that show deducted payments from various subscripting-based, online e-marketing providers, e.g. SEM resellers, business directories, etc. In light of the recent economic downturn (and possibly one that'll last for years to come), you have to understand this is very normal - think of a mom n pop small business start-up, struggling to make ends meet reacting to, say, their Google Adword spend as opposed to an Accounts Payable department of a large company having to merely get approval to pay outstanding invoices. The same company can consult with their, say SEM strategy, department to check if their monthly 6-digit Adword spend is justified (yeah, there are many out there!), while Finance department pays their 6-digit invoice amount. However, the small mom n pop shop, say corner shop for wedding gifts, is biting through their nails, hoping they won't be sent to a credit/mercantile/debt-collection agency for not being able to pay off their bills - simply because their e-marketing spend toward their, say online ad, had not even generated enough to pay for itself!

I see these cases every day of my digital account management career and it is frustrating to see these SMEs either jump on the band-wagon and dedicate too much dollars for online promotion, sales reps selling the equivalent of a vacuum cleaner that can in theory make you a martini and/or SMEs expecting their one dollar to bring in 100 dollar worth of return. All these scenarios are completely ludicrious, which is why I've decided to create this blog to share my e-marketing experience working for one of the worlds largest news and media companies for both SMEs and companies that provide e-marketing, online marketing, SEM/SEO services, etc to these SMEs.

I will skip the theoretical jargon and go straight through to actual case studies that I've worked or am currently working on. As I am degree qualified in e-Commerce, I may pull some theory in these studies, but will keep it very simple and interesting.