Knowledge Base
>
Marketing ROI

Marketing ROI

What is marketing ROI?

Marketing ROI, or return on investment, is the practice of attributing profit or growth to marketing campaigns or initiatives. 

It sounds simple, but with many businesses using offline channels to convert leads into sales, closing the loop can be tricky. Understanding all of the touchpoints your user takes to go from lead to sale can also be difficult. 


Why is understanding your marketing ROI important? 

What marketer doesn’t want to be able to prove the results of their hard work? Alongside this though, marketing ROI can help your business and marketing operations as a whole. 

Proving your marketing ROI allows you to: 

  • Justify marketing spend: Those in charge of the purse strings can be a little tricky to get budget from when it comes to trying out new advertising methods. If you can prove your ROI from your marketing, then you’ve got yourself a business case for further budget.

  • Optimise marketing outputs: Alongside getting more budget, there’s also optimising your spend. Especially for businesses using offline channels for conversion, attributing a phone call to a Google ad is impossible (unless you’re using a tool like Ruler Analytics…). Proper marketing attribution means that you can monitor your marketing performance in real time, and make adjustments as and when you need.
     
  • Measure campaign success: Have you been working hard on email content but seeing little gain? Marketing attribution can help you understand if your emails are driving users through their buyer’s journey or not.

  • Create benchmarks: Now that you have optimised your marketing and are seeing good results, you can create benchmarking numbers for you and your team to hit.  

How to calculate my marketing ROI? 

Calculating your marketing ROI is simple. Here’s a quick and easy formula to work it out: 

(Sales growth - Marketing cost) / Marketing cost = Marketing ROI