Frequently Asked Marketing 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.

More resources related to Marketing Metrics

  • You've created the content. Now, you need to measure its effectiveness to know whether your content is hitting its mark.

  • Many marketers are more comfortable with words than with numbers, but if you're willing to run a few equations, you might gain tremendous insights into the success of your content. And, more important, you'll probably be more likely to keep your job.

  • A few weeks ago, I wrote about six stupid marketing metrics that need to die. The response was overwhelming. But marketers wanted to know which metrics still matter. These four do.

  • It's amazing what some marketers are still measuring. Maybe they don't know any better, or maybe they're just married to legacy metrics that once made sense. But they're probably doing their campaigns more harm than good.

  • Many online marketers get too wrapped up in measuring data that, though useful, is not the most important for understanding how your website is performing as a marketing channel. Here are five online marketing metrics you should be looking at every day.

  • Great marketers figure out how to make lives better, with the goal of attracting lots of profitable and happy customers. But to measure how well marketing efforts help build a large and loyal customer base, it's essential to identify (and rely on) the metrics that matter most.

  • Without metrics to track performance, marketing and business plans are ineffective. Businesses need to know which success factors require measuring, and they must understand the differences between measurements, metrics, and benchmarks. For marketers, three primary metrics constitute a starting point for tracking their performance.

  • Thanks to technology, you've got a big file of data available for your review and analysis. But what to do with all those numbers? How do you change them into English? How do you help them tell you a story about an advertising campaign?

  • Marketers love metrics, but they don't always track the ones that bring the most value to their company. Here are three examples of metrics that should be retired, and three that should replace them.

  • Marketers must stand out: not as the people who make things look pretty, but as the people who drive tangible value for their organization. These metrics can help prove that marketers are indispensable for growing any business.

  • Content marketing is inherently a long-term, cumulative investment; a single piece of content won't likely lead to a sales increase. That makes it hard to measure ROI. But hard doesn't mean impossible. Here's how you can measure your content marketing.

  • Results from a recent survey found that only 17% of us indicated that our CEOs would give marketing an A. What's more, this study and others continue to suggest that a gap remains between a company's business goals and the metrics marketing uses to measure their impact on these goals. The need and opportunity remains for marketing to improve the linkage between marketing expenditures and delivered results. But what should we measure? And which metrics are best?

  • Average email open rates continued on their downward path during 2011 and the first quarter of 2012, though click-through rates increased slightly during the same period, according to Silverpop's Email Marketing Metrics Benchmark Study. Among some 20 industries studied, the computer software and media and publishing industries were standout performers.

  • These are the how-to articles—those that dispense practical, tactical advice and tips—that you and your fellow marketers found most worthy of your time and attention in 2015.

  • If you're on the content bandwagon, but you don't know your customer acquisition cost (CAC) and customer lifetime value (CLV), you're playing a dangerous game: How do you know spending all that money on content marketing is worth it?

  • Some 86% of B2B marketers say marketing analytics is very important for the success of their digital marketing strategies, according to a recent report from Regalix.

  • With the convergence of online and offline marketing, choosing the right metrics is far more important than the quantity of data measured. Measuring the right data, and acting on the results, is essential to operating Marketing as a center of excellence.

  • What are your marketing metrics telling you? If you rely on standard measurement tactics, probably not much—especially about your sales. It's time to upgrade to advanced measurement strategies that directly align with business goals—and drive sales.

  • Are your marketing and finance teams at odds? It often appears that their goals lie at opposite ends of business strategy, but it doesn't have to be that way. For ways to improve your Marketing and Finance relationship, check out these three tips.

  • Marketing operations enables an organization to run the marketing function as a fully accountable business. Marketing operations is about performance, financial management, strategic planning, marketing resource, and skills assessment and management. If you are considering developing a marketing operations function, this article outlines some the five primary responsibilities.