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Marketing return on investment

Calculate Marketing ROIHas your boss ever asked you this question: So, what was the return on investment for our last marketing campaign?

Calculating marketing ROI can be tricky, especially for an unseasoned marketer. But ROI is an important metric, and speaking in business terminology helps raise the profile of marketing within your organization while also presenting the business case for running your campaign.

To make it easier, start thinking about ROI before you run your campaign. By projecting ROI, you’ll be able to compare initial projections to actual results which will help you diagnose any areas that under/over perform from your projections.

A good set of ROI tools always helps. In Growth Panel, use the following exercises in the Marketing Campaigns section of the Library:  530 - Quantify Your Campaign Goals; 533 - Campaign Budget & Metrics; 537 - Campaign Spreadsheet.

To build your projections:

  1. Estimate your response rate
  2. Project your response conversion rate
  3. Determine how many impressions & leads you’ll need to hit your goals
  4. Project your profit (either gross or net)
  5. Record all costs
  6. Calculate projected ROI

When your campaign is complete, load your actual results and compare.

Below are screenshots of the Growth Panel tools that will calculate these for you. To access them now, set up a Growth Panel account and you’ll have them in minutes.

Marketing Return on Investment Calculations

Calculate Marketing Response Rate and Conversion Rate


Track Marketing Budget

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Calculate Marketing ROI

ROI is best used for targeted campaigns with a distinct offer and tracking mechanism. If you’re running high-level brand-building campaigns without a trackable offer, it’s a good idea to lump those costs into a “brand investment” category.

But for every other campaign, it’s powerful to show your colleagues the profit returned for your marketing investments.

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This entry was posted on Monday, October 3rd, 2011 at 2:02 pm and is filed under Marketing Strategies and Tactics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Marketing return on investment”

  1. will brennan says:
    September 9, 2010 at 5:51 am

    Measuring marketing performance is somewhat difficult to do and there seems to be an air of magic or mystery associated with determining the efficiency of marketing.
    Your approach helps to align goals of marketing with a company’s operational objectives.
    By tracking marketing performance your marketing tool provides feedback from campaigns to improve spend and company profit.
    Thx
    will

  2. Simon Baier says:
    September 12, 2011 at 8:45 am

    It’s true that results of various marketing initiatives may be difficult to measure, but just because it’s difficult, doesn’t mean it’s not worth doing - a sentiment addressed elegantly in my favorite book on the subject: How to Measure Anything
    http://www.howtomeasureanything.com/

    Highly recommended … very readable, enlightening, and plenty of substance for the statistically inclined.

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