Successfully calculating ROI helps companies determine the value of marketing efforts today and in years to come.
ROI: The king of all marketing efforts
Getting started: 5 steps to measuring ROI
Return On Investment (ROI)
Are your marketing efforts paying off?
ROMI of content marketing: How is your content marketing doing?
Brand valuationassessment of brand’s value
Customer lifetime value (CLV)assessment of each customer’s value
Marketing mix modeling (MMM)assessment of sales volume
effectiveness, efficiency and ROI of each marketing element
Ad campaign cost: $1,000
Sales increase: $3,000
Gross sales margin: $2,000
$2,000 Gross sales margin
$1,000 Ad campaign cost
200% ROMI
Short-term ROMI: How is your ad campaign
doing right now?
Long-term ROMI: What can you expect in the upcoming months or years?
Return on marketing investment (ROMI)Measures dollars of revenue for dollars of marketing spent.
Common ROI Calculations
Sources
1. Jensen, Sylvia. “4 Ways of Measuring Marketing ROI.” It’s All About Revenue The Revenue Marketing Blog RSS. N.p., 26 Nov. 2012. Web. 18 Dec. 2013. <http://blog.eloqua.com/measuring-marketing-roi/>.2. “Study Finds Marketers Struggle with the Big Data and Digital Tools of Today.” PRNewswire N.p., 12 Mar. 2012. Web. 19 Dec. 2013. <http://www.prnewswire.com/news-releases/study-finds-marketers-struggle-with-the-big-data-and-digital-tools-of-today-142312475.html>.3. Miller, Jon. “How to Measure the ROI of Your Marketing Programs.” Marketo Marketing Best Practices and Thought Leadership. N.p., 14 Mar. 2013. Web. 18 Dec. 2013. <http://blog.marketo.com/blog/2013/03/how-to-measure-the-roi-of-your-marketing-programs.html>.4. Rogers, David, and Don Sexton. Marketing ROI in the Era of Big Data:. Rep. Columbia Business School, 2012. Web. 19 Dec. 2013. <http://www4.gsb.columbia.edu/null/2012-BRITE-NYAMA-Marketing-ROI-Study?exclusive=filemgr.download>.
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ROI is the primary measurement of marketing effectiveness, yet…
28% base marketing budgets
on gut instinct
57% do not use ROI analysis to
determine marketing budgets
70% say their marketing efforts
are under increased scrutiny56%
say they’re ill-equipped to manage ROI
The challenges of measuring ROI
External factors likeeconomic trends, weather,
quality of sales rep
Marketing programs influence individuals
differently
Multiple touches are required to convert a lead
Knowing when to measure
Step 1: Define successDefine your company's key performance indicators (KPIs)
Step 2: Set goalsEstablish realistic and measurable goals
Step 3: Gather dataIntegrate departmental data to get the big picture
Step 4: Monitor goalsMonitor KPIs weekly to stay on track
Step 5: Use it or lose itUse data to make decisions and justify budgets
conversions,
# of subscribers,
user signups,
sales
Know what you are measuring:
Use proxies to monitor how your content resonates with readers:
likes, retweets, shares, followers, average pageviewsquality of lead, retention
period, lifetime value per lead,length of sales cycle
Measure secondary conversion indicators:
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