Marketing Return on Investment, popularly known as Marketing ROI, is a key performance indicator to measure the impact of marketing strategies on profit and revenue growth. For businesses and organizations, measuring different marketing initiative’s performance is important to make informed marketing strategies, justify the marketing spends and plan the budgetary allocations for future growth path. Marketing ROI also enable to make cost-effective marketing choices and helps to avoid wasteful marketing spends.
How to calculate ROI?
ROI is calculated by different methods depending on the industry type. Most widely followed formula is subtracting the marketing spend form the revenue and divide it by the marketing spend.
Marketing ROI = (Revenue Growth – Marketing Cost) / Marketing Cost
Marketing ROI (%) = (Revenue Growth – Marketing Cost) / Marketing Cost*100
For new establishments, the above formula gives accurate ROI. Whereas for the established organizations, organic sales do happen, often in a large scale. Unless it is taken into account, it may give the wrong picture. Because the assumption that all the sales are driven by the present marketing investment only is not always correct, the previous initiatives are also likely to cause sales. For a holistic ROI, the following formula is more accurate:
Marketing ROI = (Revenue Growth – Organic Sales Growth – Marketing Cost) / Marketing Cost
Marketing ROI (%) = (Revenue Growth – Organic Sales Growth – Marketing Cost) / Marketing Cost*100
Importance of calculating Marketing ROI
Calculating of marketing ROI is imperative for organizations and businesses to measure the effectiveness of marketing strategies.
Marketing ROI gives insights into the campaign performance as well as business performance.
When an organization banks on multi-channel marketing strategies, it is necessary to track the ROI of each marketing campaign to justify the spends and to optimally utilize the right medium to gain most sales and ROI.
Tracking the ROI provides a comprehensive picture of marketing campaigns with the detailed analytics of performances on different channels.
Data-driven, detailed analytical insights which marketing ROI provides, help to improve the strategies and reach the targets with revamped plans and efforts.
In the end, businesses need to deliver the set targets to ensure that the organizations do sustain and thrive.
Without ROI tracking, it is like pouring the money without a purpose.
How to track ROI?
ROI can be tracked in a variety of ways. Marketing campaigns across the channels can be tracked to measure effectiveness and ROI. Office24by7 provides a comprehensive ROI tracker, where all the marketing spends can be tracked form a single tracker. You can check the all-encompassing Office24by7 Smart Tracker here.
Track ROI with Virtual Number
Use a virtual number to different campaigns across different channels to track the ROI. Whether it a hoarding, paper ad or social media marketing, give a virtual number to your campaign. Based on the calls to the given number and subsequent conversion of the lead give the ROI form the particular marketing channel. You can also measure which channel is performing better based on ROI.
Track ROI from Landing pages and PPC Campaigns
Office24by7 Form Builder allows creating customized forms with chosen fields to track the visitor details and ROI. Create a form of with the required fields and integrate the code to web forms, PPC campaigns on both Google and Bing, as well as other click-to-call campaigns and track the entire ROI, including the cost per lead.
Track Social Media ROI
Social media spends and ROI can be tracked with ROI tracker comprehensively. Ad all your social media campaigns to ROI Tracker with an integration and get the entire ROI picture including the campaign spends, clicks, lead details and the campaign performance at one place.
Track ROI form Downloads
Downloads are one of the main components of the content marketing for lead generation. You can track the ROI of a content marketing initiatives comprehensively. Create a form as required from the Form Builder of ROI Tracker and add the code to downloads. You would be able to track the leads as well as ROI form the downloads.
Track ROI with APIs
APIs help to track the ROI from the third-party sources. Integrate any third-party lead generation tool whether it is affiliated marketing channels, or channel partners, or any other third party source, integrate with API and track the ROI accurately.