Which Marketing Channels Have the Highest ROI, and Where to Start

Where should the marketing money go first? It's the question behind any budget, however small.

It's a fair question, and the industry answers it badly. Ask about the highest ROI marketing channels and you get a different answer from everyone selling one. Every platform claims to be essential. Every consultant has a favourite, usually the one they sell. Meanwhile the figures that do exist point to the channels you already own.

Short answer: the channels with the best returns are almost never the newest ones. Email and organic search outperform paid channels over time, because you own them and they accumulate. For most small businesses the sensible order starts with what you already own, and paid comes last.

What people are actually asking

When an owner asks which channel has the best return, they're asking two things at once. Where can I spend the least, and where can I get customers the fastest.

They have different answers, and mixing them up is how budgets end up in the wrong place.

Fast is expensive. Paid advertising delivers speed, and you pay for that speed every month, at prices that move in one direction. Cheap is slow. Owned channels cost time and consistency, then keep paying long after the work is done.

Neither is wrong. What goes wrong is the order, and it goes wrong whenever a business chases whatever's fashionable.

The ranking, and what it hides

Any ranking of channels comes with a warning. Your market, your margins and your execution can move any line up or down. The table compares them on what they cost and how quickly they pay back.

The interesting column is the last one. A channel that compounds is an asset; a channel that doesn't is a subscription you'll be renewing forever.

Email keeps winning and nobody wants to hear it

Thirty-six to one. That's the average return Litmus puts on email, higher than any other channel on its figures.

Treat it as a direction and not a promise. It's an average, and the page doesn't say how it was calculated, so your own return will depend on your list and on what you send. The ranking is the useful part.

The reason is unglamorous. The list belongs to you. No algorithm decides who receives the message. No auction raises the price in your busy season. And the people on it already know who you are, which is the most expensive part of marketing and it's already paid for.

If sending anything at all feels like a project, it needn't be. Some marketing automation tools cut a monthly email down to an hour of work.

Given how cheap the channel is, one situation is worth checking for: a business paying every month to reach strangers, while a list of past customers goes years without a single email.

Search takes longer and then stops taking longer

Organic search behaves unlike anything else on the list. For months it appears to do nothing at all. Then pages start to appear, and something written once brings enquiries every week with no further spend.

That accumulation is why established sites feel unbeatable in their own niche. Their old work is still earning while yours is still warming up.

It cuts the other way too, and we'd rather be straight about that. Search is changing shape. More questions get answered on the results page or inside an assistant, so a page can gain visibility and lose visits at the same time. The work that earns those mentions is the same work that earned positions: clear answers to real questions, on a site that loads properly, signed by a person.

If you serve a physical area, work on your Google Business Profile and the signals around it as well. It costs nothing, and it shows up when someone nearby is ready to buy.

Not sure which of these your business should start with? We're Salty Lavender, a full-service marketing agency in Faro. Talk to us.

The channel almost nobody builds

Word of mouth is the most trusted channel there is and the least worked on. Everybody relies on it; almost nobody builds it.

In Nielsen's trust in advertising study, which surveyed more than 40,000 consumers, 88% said they trust recommendations from people they know more than any other channel.

Referrals work better as a system than as goodwill, and the system can be as ordinary as asking at the right moment and thanking whoever sent someone your way.

Where paid advertising actually belongs

Paid search and paid social both work. We run them and we'll keep running them. The problem is what they become when they're the whole plan.

Costs climb as more advertisers bid for the same attention. Results stop the day the spending stops. And advertising amplifies whatever it points at, so sending traffic to a slow site or an unclear offer mostly helps more people discover you weren't ready.

As a substitute for foundations, paid is the most expensive way to find out your foundations are weak.

It earns its place in one role, and it's a good one. Amplifying something already proven. A page that converts, an offer people already say yes to, a season you know performs. There's also a case for running ads as research, because a fortnight of them will tell you which message converts long before content would. That distinction is the whole of the difference between paid and organic search.

The order that keeps working

1. Fix what you already own. A site that's clear and quick. A business profile that's filled in. Reviews that get answered. Almost no cost, and it lifts everything that comes after

2. Turn email on. Collect addresses everywhere you touch a customer, then send something useful once a month

3. Start the slow engine: content aimed at what your customers actually search for, and at what they actually ask you

4. Make referrals a system instead of a hope

5. Then pay to amplify. With the foundations converting, every euro of media works harder. And you can switch it off without your marketing disappearing

Notice what's missing from the top of that list. Whichever platform launched a new format this quarter. The number of channels was never the goal, and posting more often won't fix a problem of order.

Industry changes the weighting more than the order. A restaurant leans harder on local search and reviews, and a business selling to other businesses leans harder on content and referrals.

The part that makes this uncomfortable

Underneath the question about returns there's often a different problem. Measurement.

Plenty of businesses can't say which channel produced their last ten customers. When that's true, budget decisions get made on feeling, and on whoever presented most recently.

Fixing it doesn't need enterprise software. Ask new customers how they found you and write the answer down. Put tracking on campaigns. Look at which pages people saw before they enquired. Imperfect data beats confident guessing by a wide margin, and after a few months of it you can check this entire article against your own numbers.

When none of this is your problem

People find you, they understand what you sell, and they still don't buy. In that case the order of your channels isn't what's broken. More traffic through a door nobody walks through is just a bigger audience for the same outcome, and that has a different diagnosis entirely.

Worth ten minutes before any budget moves.