Marketing ROI is the practice of attributing revenue growth to the impact of your marketing initiatives. Practically, marketing ROI is used to justify the budget allocation for ongoing and future initiatives. So it’s important to know how to calculate the ROI accurately. Especially for activities that do not directly provide the metrics of calculation. This guide teaches you the basics of calculating Marketing ROI in simple terms.

2. [This Simple Guide to Marketing ROI is designed for those
trying to understand the basics of calculating marketing ROI. It
teaches you everything from basic formulas to best practices in
simple terms. If you have any further questions, you can get in
touch with us. We’ll be glad to help you out.]
Whether you are planning a new marketing campaign or
testing the efficiency of your current marketing activities,
ROI is the metric constantly used.
At the most basic level, ROI compares the amount of money
you spend on a project to the amount you earn from it.

3. The ultimate goal of ROI is to earn more money than what you
spend on a marketing campaign. What’s considered as a good
ROI depends on the type of campaign and platform used.
Determining the exact ROI from each campaign is challenging.
When dealing with strategies like PPC, social media ads, email
marketing, you might be able to easily see the ROI.
WHAT
IS ROI IN
MARKETING?

4. But if you are dealing with other strategies like content
marketing, podcasting, vlogging, it might be difficult to tell if
the campaign is directly leading to a purchase.
When it comes to calculating marketing ROI, here’s a simple
formula from HubSpot:
[((number of leads x lead-to-customer rate x average sales
price) - cost or ad spend) cost or ad spend] x 100
Number of Leads: How many people converted to lead?
Lead-to-customer Rate: What percentage of leads turn into
customers?
Average Sales Price: An average sales price after applying
seasonal discounts and offers.
Cost or Ad Spend: The amount you spent on a marketing
campaign. Both the cost of running the ad and the associated
service charges.

5. CALCULATING
MARKETING ROI’S OF
DIFFERENT MARKETING
STRATEGIES
Blogging:
If blogging comes under your marketing strategy, you should
measure time-related costs, production, and promotional
costs. To track time-related costs, calculate how much time
an employee spends on creating the content and multiply it
by hourly rate. If the blog links to a landing page or any other
marketing material, use a tracking URL to see how many
visitors are coming directly from the blog.

6. •
Through tracking visitors, leads, and sales, you can understand
how effective is your blogging strategy.
For example, if you spend $900 on creating 5 blogs posts and
another $100 for promotion. You attract 10 leads out of which
5 get converted. Let’s say you earn $2000 per client.
[((10 x 0.5 x $2,000) - $1,000) ÷ $1,000] x 100 = 900%
That is the percentage of ROI you earn. You can now
experiment with different content strategies and optimize the
returns even further.

7. While many businesses are reluctant to use email marketing,
B2B still finds it very useful. The ROI here depends on the size
of your mailing list, type of email ad, and audience. So email
marketing is something you can try.
You might want to add a tracking URL to see the traffic it drives
to your site.
For example, a bookstore offers a weekly newsletter to
customers and those who sign up on their website. An author
pays them $100 to promote the book and linking the newsletter
to their product page. $20 is the price of a single book.
EMAIL
MARKETING

8. •
With tracking URL, you can see that it drove 50 visitors to
the product page, out of which 20 filled the lead form and
17 purchased the book.
[((20 x .85 x $20) - $100) ÷ $100] x 100 = 240%
After seeing how much money they gained from the newsletter,
the author may continue placing the ads.

9. With PPC ads, you pay for every click the user makes on your
ad. After you launch the ad, you need to closely monitor it to
optimize for ROI.
For Example, an online hardware store spends $1000 on a PPC
campaign. Out of 10 visitors they receive, 3 of them place the
item in the cart, and 1 makes a purchase for a $1000 item.
[((3 x .33 x $1,000) - $1,000) ÷ $1,000] x 100 = -$1
From this ad, the company realizes that paid ad strategy is not
working out for them.
PPC
CAMPAIGNS

10. BEST
PRACTICES
FOR
MEASURING
MARKETING
ROI
When it comes to measuring marketing ROI, things can get tricky.
While paid ads can provide specific metrics to measure the ROI,
it’s challenging to measure ROI for other marketing material.

11. •
Along with ROI, these are the metrics you should keep an eye
on. This can give you an accurate measure of the effectiveness
of your marketing campaigns.
• Time Spent: How much did your marketing team spend on
creating the material?
• Production Cost: The total cost of service and software
needed to create the campaigns.
• Promotional Costs: Track the amount you spend on various
promotions.
• Analytics: Use a tracking URL to determine if your content is
driving the desired traffic.
• Non-Financial Returns: Did you get any new followers,
subscribers, or likes due to your campaign? These metrics
may not directly translate into ROI but boost your
brand awareness.

12. CONCLUSION
As your marketing strategy branches out to different platforms,
ROI calculation gets challenging. There might be platforms
that do not directly contribute to the financial goals but play a
supporting role.
The guide explains the basics of calculating your marketing ROI,
but as your organization grows, you need a robust plan to rely on.