How did your last campaign go? When I ask this question, I want to know if your marketing is generating business in a profitable way. To figure out something's profitability, many marketers look at that all-important return on investment (ROI).
ROI compares the amount of money you spend on a campaign with how much revenue you gain from it. It can be incredibly helpful for finding out what works and what doesn’t for your business. Here’s how to calculate ROI from marketing campaigns.
Establish What You Consider to Be Good ROI
Deciding on one overall marketing ROI benchmark is challenging. Whilst PPC can provide precise data, it can be difficult to see how views on a blog translate to riches.
Blog posts, podcasts, videos - how did these lead directly to a purchase? You can make this easier by ensuring the content is linked directly to a landing page. However, determining the success of content marketing has remained a mystery to marketers for decades.
Aside from looking at cold hard cash, you might also want to consider other factors that play a part in the success of your marketing strategy. Sometimes, it’s easier to track something a little more tangible like audience growth. While this doesn't offer an immediate financial return, they have the potential to indirectly boost customer relationships and help you achieve your brand loyalty goals.
One effective way to set a ‘good ROI’ benchmark for each marketing strategy is to look at the return from similar tactics you've tried in the past as well as your current sales numbers. That information should help you create ROI benchmarks that are realistic for your company.
Here are some fantastic ROI stats to inspire you.
- A business has the potential to make $38 dollars for every dollar they spend on an email.
- In HubSpot’s State of Inbound Report a couple of years ago, they found that 82% of marketers who blog see positive ROI in their strategy.
- A staggering 83% of marketers say video marketing brings some juicy ROI.
When it comes to calculating marketing ROI, here's a simple formula you can follow - but we won’t be mad if you just use our calculator instead.
Simple ROI Calculations
- Calculate how much you spent to produce the content, whether it’s a blog post, video or eBook. (Even if you produce it in-house, there’s still a cost attached).
- Determine what it cost you to promote the content. This could be anything from PPC or social distribution.
- Add up the sales you receive directly from the content. We know this isn’t always as straightforward as a simple CTA click or form submission. More often than not, it’s a little less direct.
- Now calculate your marketing ROI, here’s an example:
(Return) £2000 – (Investment) £500 = £1500
£1500 / £500 = 3
3 x 100% = 300% (ROI)
If you're awful at maths, don't worry, stick with us.
To make the most of your marketing spend, you need to know how to measure its results. Establishing KPIs is cool but ROI is the lifeblood of your business.
It’s not always easy to calculate the revenue generated by your marketing efforts. Certain tactics like social media and content marketing start long before a purchase takes place.
That being said, marketers should always strive to connect the dots between activity and revenue. That’s why a tool that does just that might come in handy.
Use Our Campaign Budget Calculator to Make the Most Out of Your Resources
You might have tried your hand at maths and realised you’re much better at marketing. Don’t worry, you can use our handy little budget calculator so you can get some concrete ROIs and solidify your branding budgets.
It’s pretty straightforward and gives you clear figures to take away. Get access to it below.