Marketing ROI: How to Measure Marketing Effectiveness
Look, let’s address the elephant in the room: marketing can get expensive. Depending on your biz, you might spend up to 10% of your revenue just on marketing.
That might sound pricey, but marketing has so many benefits for your business! From connecting your brand with new shoppers to launching a successful creator campaign, marketing is the key to revenue growth.
With that said, though, you want to make sure that anything you spend money on in your business is worthwhile. That’s especially true with brand awareness channels like social media or blogs. If you don’t track the data carefully, you could be accidentally throwing your marketing budget out the window.
That’s where return on investment, or ROI, comes into play.
Let’s dig into what, exactly, marketing ROI is and 5 steps you can take to measure your campaigns’ effectiveness.
How does marketing ROI work?
A marketing ROI calculation tracks all of your marketing activities. It uses analytics data and benchmarking to help you figure out how effective your marketing activities really are.
You need marketing that’s smart, effective, and affordable. If you’re tracking your marketing ROI (and you should be), you’ll get insight on:
Which channels bring in the most sales.
Your average marketing spend—and where you could cut marketing expenses.
Which campaigns attract the most shoppers.
Whether you’re reaching your target audience.
If you’re making enough sales to justify your current level of marketing spend.
By tracking ROI in marketing, you can steer your marketing department away from high-cost, low-yield activities. That translates into more money in your pocket for less hassle. What’s not to love?
In an ideal world, you want ROI to be as high as possible. The higher your ROI, the more your sales are going to grow—although creating a following of loyal shoppers doesn’t hurt, either.
5 steps to measure marketing program ROI
The problem is that most brands aren’t sure how to track marketing ROI. From social media to your website to emails and everything in between, omnichannel marketing makes it a major headache to define attribution. 35% of brands believe tracking ROI is extremely important, and 44% of marketers want to improve how they measure ROI—but where do you start?
Just because calculating ROI is difficult doesn’t mean it’s impossible. You just need the right approach. Follow these tips and tricks to improve your marketing effectiveness with the power of marketing ROI tracking.
1. Track when your social media followers convert.
Whether you’re on Tiktok, Instagram, or Facebook, your brand has some kind of social media presence. The great thing about social media is that it’s highly trackable, which translates into easier marketing ROI.
Make sure you’re using social media tags to track your followers as they navigate from social media to your website.
As long as you’re using tags, you’ll be able to track your followers at every step of the journey, from the first time they visit your website to the golden moment when they finally buy your products.
Depending on the social media platform, you can pull audience insights directly from your social analytics. For example, if you run a Facebook page, you can consult the Facebook Business Suite to track all of your followers’ activity. See how often people like, share, or comment on your posts at a high-level view—and how many people are buying products from your social media presence.
As long as you set up a conversion goal and then track your conversions, you can understand and then optimize your conversion rate. Sure, likes and follows are nice, but you want to track conversions because that’s what leads to dollars in your bank account.
P.S. This is especially helpful if you run a small, product-based business that doesn’t have a website. If you live and die by your social media, make sure you’re tracking follower data for a full picture of your marketing ROI.
2. Track all of your marketing efforts.
When it comes to marketing, omnichannel is where it’s at. Diversifying your channels helps you reach a wider audience, as well as initiate several touches with shoppers.
There’s just one little problem, though: it’s hard to keep up with multiple marketing campaigns. If you’re spending money on:
… you need to track all of that data for a full picture of your marketing ROI.
That means tracking the performance of each campaign on every platform, but also looking at your marketing ROI as a whole.
For example, let’s say you see that your overall ROI is going down. You realize you’re generating awesome ROI with an email marketing campaign, but paid ads aren’t pulling their weight. By tracking marketing ROI, you can start making decisions about how much time and money you put into paid ads.
3. Set goals and monitor KPIs.
Another way to measure your marketing effectiveness is to track your goals in the form of key performance indicators, or KPIs. KPIs are quantifiable, bite-sized milestones that help you reach your goals. After all, a lofty goal like “generate 2X returns on email” is hard to achieve on its own
Increase open rates by 50% this month.
Boost email subscribers by 10% in Q2.
Decrease unsubscribe rates by 10% with this campaign.
… you stand a much better chance of understanding your marketing efforts' efficacy, as well as how you can get more for your money.
Any time you plan a marketing campaign, make sure you define your big goal and KPIs during the planning phase.
You can even assign a dollar value to every KPI, so your marketing team understands the real value of every view, click, and conversion.
It’s also insurance against vanity metrics, which will help you focus on numbers that actually have an impact on your bottom line.
4. Communicate with your creators to understand their data.
Content creator campaigns generate serious ROI. But it does take a village to make them run smoothly. The best way to boost your creator campaign effectiveness is to focus on growth. That might mean working with creators who advertise your brand on a new platform, like TikTok, for example.
Over time, you’ll find a handful of awesome, effective creators who boost your brand—and speed up the content creation process. However, that doesn’t mean you should get too comfortable.
If you’re outsourcing any part of the marketing process, you need to keep your eye on the data to ensure marketing ROI.
Use a platform like Trend to stay in constant communication with your creators. With unique tracking URLs and discount codes, it’s easy to see which creators generated actual sales for your campaign. That makes it a cinch to identify your top-performing creators so you can make even more sales.
5. Check your SEO performance for long-term ROI.
Paid ads might get you big results in the short term, but if you’re looking for effective, long-term strategies (that won’t burn a hole in your pocket), go with search engine optimization, or SEO.
SEO is critical for finding shoppers through organic search, but how do you know if your SEO is actually working?
Tools like Ahrefs make it possible to track how your current rankings are doing and even help you plan rank-worthy content going forward.
It’s nearly impossible to measure your SEO effectiveness without
The bottom line on measuring marketing effectiveness
You can’t manage what you don’t know. Even if you think your marketing is effective, you can’t know for sure without hard numbers. Since 72% of brands attribute their success to tracking their return on marketing investment, it’s critical to measure your campaign effectiveness.
It can be tough wrangling an omnichannel campaign into a marketing attribution model, but it’s possible with the right approach. If you’ve never tracked your average ROI before, try these 5 tricks to see how your business stacks up.
Of course, it's good to have help in your corner. If you’re looking to partner with content creators, give Trend a shot. We spell out your ROI in black and white, so you never have to wonder if your creator campaign is working. Create your free Trend account now.