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how to calculate marketing roi

How To Calculate ROI on Marketing Campaigns?

Sazzad Hossain
Sazzad Hossain

How should campaign ROI be determined, and how may your conclusions benefit your clients in the long run?

Marketing initiatives are only as successful as their capacity to increase sales. Agencies strive to show clients that their work has a significant return on investment. The most effective approach to illustrate this high degree of performance is through data-driven metrics.

Every time you start a new marketing campaign, you should determine whether the project’s expense is beneficial to or detrimental to your business. Many marketers consider ROI, or return on investment, when assessing an item’s profitability. ROI compares the amount of money you spend on a project with the amount of revenue you make from it at its most fundamental level.

What does it mean to have a good ROI in marketing?

ROI aims to generate profits greater than $1 for every dollar invested in a marketing effort. Depending on the type of marketing approach you use, your distribution channels, and your business, what is deemed a “good ROI” can change.

Due to the diversity of marketing strategies, it is difficult to establish a single benchmark for marketing ROI.

You might be able to readily examine how your ad’s return compares to others that are similar when working with an online ad strategy like PPC, where ROI data is often tracked automatically. Platforms like Google Ads also have years’ worth of detailed data to support their claimed benchmark of 800% ROI.

It could be difficult to determine whether your blog posts, podcasts, or videos are directly resulting in a purchase if you’re working with other techniques, including content marketing — especially if the content isn’t on or immediately linked to a landing page.

In fact, according to the Content Marketing Institute, marketers have felt as though calculating ROI in marketing is a mystery for decades. Although tracking URLs and other technologies have made it easier to measure the success of content, CMI still advises considering ROI over the long term and taking audience growth into account in addition to financial gains.

For the majority of firms, looking at the results from comparable strategies you’ve attempted in the past as well as your current sales figures is a solid method to establish a “good ROI” baseline for any marketing campaign. You should use this information to develop ROI benchmarks and goals that are appropriate for your business.

Here is a straightforward formula you can use to figure out your marketing ROI:

marketing roi

The Marketing ROI Formula

This is the formula to calculate marketing ROI

[((number of leads x lead-to-customer rate x average sales price) – cost or ad spend) ÷ cost or ad spend] x 100.

You must determine the following in order to utilize the marketing ROI formula:

  • Generated Leads: How many individuals became leads?
  • Lead-to-customer rate: What proportion of leads converted to actual clients? Your lead to customer rate would be 12%, or 0.12, if 12 out of 100 leads result in customers.
  • The typical cost of your product is the average sales price. If you occasionally offer discounts or change pricing in various ways, an average can be useful.
  • How much money did you spend on developing and publicizing the marketing campaign? Here, you can take into account expenses like ad spending, the hourly pay of team members, or expenses for creating content.

When deciding whether a marketing campaign is successful, you might wish to take into account additional non-financial factors in addition to actual income. These might include social media likes or follows, unexpected website traffic, or even an increase in customer trust.

Although these things don’t provide a quick financial boost, they might later on indirectly increase sales or customer relationships.

Aspects of Marketing ROI

Written Content

Even though writing a blog post might be less expensive than making a video, it can still take time and money to create written content. If your marketing strategy includes blogging, you should factor time-related expenditures, production costs, and promotional charges into your overall budget. Keep track of how many hours each employee spent working on the project, then multiply that figure by their hourly rate to convert time into money.

If a blogger is paid $10 per hour and it takes them four hours to produce a promotional post, your total cost will be $80 in labor in addition to any expenses incurred in promoting the post.

Use a tracking URL rather than a standard page URL if your blog connects to a landing page so you can track the number of people who arrive at the page directly from the blog.

You may gauge the effectiveness of your plan by monitoring traffic, leads, and customer conversions related to a blog post or article. If you’re producing content that increases ROI but you’ve noticed that the writing process is taking too much time, you might want to search for ways to speed it up. If you’re not seeing a ROI, you may need to change your plan altogether or adopt a different marketing tactic.

If the company can make money at this rate of return, they might choose to stick with their current strategy. They might try making a video to see if it’s more effective or try to publish blogs more frequently if they enjoy the tactic but want to boost ROI.

Email Promotion

Despite what some people may believe, email is still a vital marketing tool. In fact, for every $1 spent on email marketing, a company might make $35. Although the ROI may vary depending on the size of the mailing list, the type of advertisement included, or the audience the email is intended for, this marketing strategy may still be worthwhile for a business to pursue.

A linked ad or CTA in an email may not need you to measure production time, but you should still monitor the traffic it sends to your website. We advise utilizing a tracking URL, similar to the one applied to written content.

Video Marketing

A staggering number of marketers claim that video has a positive ROI. However, just like with any form of content marketing, making videos will require time and money. Even purchasing or renting filmmaking or editing software may be necessary.

Use these suggestions to film a marketing video economically as you write and produce it. Additionally, you should keep tabs on the overall expense for labor, equipment, and promotions.

Make sure you decide how you’ll evaluate the success of your video. For instance, if you post a video to social media sites, the post description should contain a tracking URL that points to the product’s landing page. In this manner, you can determine how many people were attracted to the page as a result of the video post.

Digital Marketing

Advertised Content

When a brand lacks the resources or time to produce its own branded media, it may pay an individual, publisher, or business to provide sponsored content. While hiring someone outside of your office will cost your business money, it’s worth considering the extra time your team will have if they aren’t required to create content to work on other worthwhile projects.

The ROI calculation should be used to compare the payment for the advertised content to the amount of money you made from the campaign, even though you don’t need to keep track of your own employees’ labor expenditures.

PPC Campaigns

Pay-per-click advertising involves paying for each click on your ad, even if it doesn’t result in a purchase. Even though Google claims that its advertisers see a high return on investment, small businesses continue to spend 25% of their budgets on ineffective PPC advertising. You should regularly monitor ROI and wasted expenditure once your ad is launched in order to learn from them and prevent suffering significant ad-related losses.

Paid Social Media Promotion

If a business has customers who frequently use social media sites like Facebook, Twitter, or Instagram, it can be a good idea to boost one of their posts so that it appears on the news feeds of those customers.

You can define a goal or audience target, a time frame, and a budget for the majority of social media campaigns. You may evaluate the effectiveness of the social boost approach and the kinds of articles that provide the highest returns by monitoring your ROI.

Best Practices of Measuring Marketing ROI

Determining ROI in marketing can seem challenging. Even though more conventional PPC and social media ads can offer more precise rates of return, it can be difficult to connect actual revenue figures to marketing content like blogs and videos.

Whatever marketing strategy you choose, keeping an eye on the following indicators can help you determine whether your campaigns are actually successful:

  • How long did it take to produce the marketing collateral?
  • Keep track of the overall cost of the equipment, labor, and software used to construct the campaign.
  • Costs associated with promotion: What did you spend on promotion? If so, include it in your overall expenses.
  • Page Analytics: Use a tracking URL to find out if your content is bringing visitors to the landing page for your product.
  • Non-Financial Returns: Did your campaign result in any social media engagement, unforeseen traffic increases, or other benefits? If so, this can still enhance your brand’s recognition.


You are sailing in thick fog if you don’t test, measure, and evaluate the ROI of your marketing. You don’t have a reliable means to determine whether your marketing is working, whether it needs improvement, or even if it is working at all.

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