Every marketing dollar spent should give something back, right? Well, research shows that only about a third of marketers even know how to calculate their campaign’s return on investment. It shouldn’t matter whether you’re posting ads, sending email campaigns, or even hiring an SEO agency in Utah; knowing the ROI helps streamline the focus of your efforts.
Start With the Core Formula
The ROI on Marketing is easily expressed in the following formula:
- ROI (%) = [(Marketing Revenue – Marketing Expense)/Marketing Expense] x 100
If an initiative costs $5,000 and generates $20,000 in revenue, it boasts a 300% ROI.
More Attribution Models:
Basic formulas will not work for more complicated campaigns. In these cases, we rely on attribution models, which include:
- Multi-touch attribution gives credit for the sale to all of the touchpoints a customer has interacted with in the campaign.
- Time decay, which gives most of the credit to the first touchpoint that interacts with the customer before a sale.
For small teams, marketing tools like Google Analytics 4, HubSpot, and Semrush help to track these models.
Track the Metrics that Create ROI
These supporting numbers reveal how you spent your marketing dollar and where the money is coming from.
- Customer Acquisition Cost (CAC): Total campaign spend divided by the number of new customers gained. This metric is more valued the lower it is.
- Customer Lifetime Value (CLV): The value the customer will bring to the company over the course of the business relationship. A high CLV justifies a high CAC, which many SEO Utah specialists tell their clients when they want to measure organic campaigns right away.
- Conversion Rate: A key measure of success for your business, it reflects how many visitors to your website or landing page complete the actions your business needs. This could include filling out a form, signing up for an email list, or completing a purchase.
- ROAS (Return on Ad Spend): Measuring return on ad spend is particularly important when evaluating the potential success of an advertising channel, as it reflects the revenue generated per dollar spent.
Solve the Attribution Puzzle
Most buyers interact with multiple marketing channels before they convert. This can span from clicking on a social media ad to reading a blog post, to receiving an email, and finally doing a branded search. Depending on the attribution model you choose, the credit for the conversion will be assigned to the specified channel. SEO Utah service providers should prioritize the use of multi-touch attribution models, as organic search can play a significant role in facilitating conversions, even when paid channels close the conversion. Touchpoint mapping can be done with Google Analytics 4, HubSpot, or your CRM to ensure each channel is appropriately recognized.
Match the Timeframe to the Channel
If ROI for a marketing channel is measured too early, it can give the appearance of underperformance. Paid ads can deliver results in just a few days, but content and SEO services in Utah can take several months. Measure the performance of channels that deliver results quickly on a monthly basis. Measure the performance of channels that yield results over a longer period of time on a quarterly or cumulative basis. Use the results from prior campaigns to set benchmarks and be realistic to avoid discontinuing a campaign right before it becomes successful.
Turn Measurement into Action
Measuring ROI helps you budget confidently for your next campaign. Increase your budget for channels that deliver ROI and A/B test advertising copy, offers, and landing pages. Companies that partner with an SEO Utah provider typically conduct these keyword and traffic ROI reviews to connect search visibility to revenue.
Final Thoughts
Calculating the marketing return on investment (ROI) is not a single-step process; it is a practice. Evaluate your expenses honestly, link every possible metric to a dollar figure, select an attribution model that reflects your customer’s journey, and give each marketing channel the time it deserves. Do that on a regular basis, and whether you run your own campaigns or rely on an SEO Utah team, each dollar spent on marketing is no longer a sunk cost, but an investment.