Marketing ROI: How to Track Performance and Results

Marketing is sometimes viewed as a luxury instead of a necessity. But if you can show your marketing’s positive ROI, you may be able to justify its cost with key stakeholders.

Identifying key performance indicators (KPIs) that support strategic goals will help you determine which metrics to track, providing a clear picture of your ROI.

What is Marketing ROI?

Your Return On Investment is the measurement of financial gains generated by marketing. To calculate that return, you must compare the revenue earned against the total cost of implementation. That reveals the effectiveness of your strategies and tactics so you can make appropriate adjustments to optimize your budget.

Here’s how to measure marketing ROI as a percentage:

And it’s not just numbers. Marketing ROI can also be measured by brand sentiment and survey data. That insight tells you how your target audience feels about your content, which contributes to conversion rates, customer loyalty and word-of-mouth.

Metrics to Avoid

Not all marketing metrics are worth tracking. Vanity metrics only provide surface-level insight. They’re more about visibility than financial and business impact. They can also be misleading, especially if you use them to prove the effectiveness of your marketing plan without context. That could result in pursuing unqualified leads, failing to optimize content for conversions and spending money in the wrong places.

Essential Elements of Tracking Marketing ROI

• Goals and objectives: You can’t understand the success of a strategy if you don’t have goals to compare it against. Setting objectives provides you with direction by defining what you want to achieve and how you’ll measure results.
• Defined KPIs: Those are the numbers you plan to track. You can use KPIs to monitor progress over time and guide future decisions. For example, if one of your business goals is to generate 10% more leads, you should track the cost per lead and conversion rates as KPIs.
• Data sources: You can assess marketing ROI from a variety of data sources, including analytics platforms, customer relationship management systems and ad accounts. They provide calculations based on your input to prevent disconnected results.

Tracking Performance on Different Channels

• Paid ads: Display and social ads are designed to keep products and services top of mind and provide trackable metrics, while paid search ads are more conversion-focused. Certain metrics provide a direct look into how efficiently you’re spending your marketing dollars. You can monitor KPIs such as:
  • Cost per lead: How much you’re paying to generate a lead
  • Return on ad spend: Revenue you generate for every dollar spent on ads
  • Quality score: Provided by platforms like Google to showcase ad relevance and expected click-through rate
  • Landing page conversion rate: How well your landing page converts leads to customers

• Organic content: Blog posts and web pages build and maintain long-term ROI. Tracking the performance of those types of content showcases how well your content is driving traffic in relation to your budget. Pay attention to:
  • Keyword ranking: Keyword visibility for terms your audience is using to find your content
  • Pages per session: Number of pages a visitor views during a single visit
  • Engagement time: How long a user stays on your site and interacts with your content

• Social media: You can build awareness and brand trust through social media strategies. Tracking the effectiveness of your campaigns reveals how social content drives conversions. When presenting ROI, include:
  • Web traffic from social channels: How many users visit your website from your social channels
  • Conversions: The number of completed actions that originated from social traffic
  • Engagement rates: The number of likes, comments, shares, saves and clicks on your social content

• Email marketing: Analyzing conversion rate and revenue per email shows the ROI generated by email marketing. Those numbers can confirm if your content is serving your audience’s needs through completed actions like purchases and bookings. Pay attention to:
  • Conversion rates: The percentage of recipients who complete the desired action and connect with your messaging
  • Revenue per email: How much income each email generates
  • List growth: How quickly your subscriber base expands

Importance of Attribution

Attributing marketing ROI to specific touchpoints tells you which channels produced the best results. That insight allows you to push more money into successful channels and pull it from less productive options.

You can employ single or multi-touch attribution. Here’s how they work:

• Single-touch: You attribute all conversions to one touchpoint, whether that’s the first or last interaction before a conversion is made. It’s a simple way to track data in short sales cycles.
• Multi-touch: Credit is shared across several interactions. That approach reveals more insight into customer behavior throughout the buyer journey.

Build Results-Driven Strategies with MadAve Marketing Management

A well-defined strategy will guide your tactics and showcase the efficacy of your efforts when proving marketing ROI. At MadAve Marketing Management, we’re well-versed in analyzing data. We use that information to provide you with appropriate recommendations. Learn about our outsourced marketing services and contact us to get started.