|Question:||How do you determine the ROI of a large marketing program?|
|Answer:||Now with budgets tightening and companies demanding an ROI on their marketing budget more than ever, we get a lot of questions about how to determine the ROI of a marketing plan.|
The ROI of a marketing plan is different from that of an email newsletter. Email newsletters are a specific tactic, and typically well defined. In fact, we have some great calculators on our site that will help you determine the ROI of e-newsletters.
But what if you’re responsible for a major marketing effort that includes public relations, advertising, on and offline marketing, new branding campaigns, and other major marketing efforts? What if you’re in a B2B situation where marketing plans can get very complicated. Simple calculators fail miserably here, and there is a good reason for this.
It all depends on your objective
Calculating the costs of a marketing program is an important part of determining the program’s ROI. But identifying the costs is actually one of the easier parts. The far more difficult component of the ROI is determining how effectiveness of the marketing plan.
But what do we mean by effectiveness? Well, if you actually go out and survey various companies about how they calculate marketing ROI you’ll get several different answers. For example, some may say that effectiveness is determined by increases in sales volume (that is, obviously, the most likely response), but others may say effectiveness is actually the number of leads generated by a marketing tactic or program.
In fact, it gets messier. Here are some of the ways you can determine effectiveness. Number of press releases or pieces of mail, number of new customers, number of web hits or visitors, awareness changes (or the extent to which people are more aware of your product), impressions (number of articles in the press multiplied by the potential readership of each publication), content analysis, recall measures, and on and on and on.
If you’re responsible for marketing, you may be getting depressed right now. But the reality is that many firms do not have clear marketing plans, so having a clear understanding of the ROI for a plan is difficult.
They key is to first establish which objective you want to have for your marketing plan. Is it sales volume, web visitors, or what? This is the key to deciding on how to determine your marketing ROI.