Calculating a return on investment (ROI) for some businesses is much easier than others. For instance, if a retail store has onsite ecommerce set up to track revenue then you can apply a simple calculation to derive at your ROI. You'd take the revenue gained over the cost spent for your marketing effort as your ROI calculation. Having access to true monetary revenue makes it pretty straightforward for marketers to understand their campaign ROI performance. But what about those marketers that are not tracking ecommerce or a monetary value that enables them to track ROI? How can they measure ROI with metrics outside of dollars to convey the story of return for their campaign?
Marketing ROI that is not tied to monetary values can be a bit tougher to quantify — and in some cases much more subjective. You must lean on other telling metrics such as lift, engagement and conversions to prove to the client what our marketing efforts are doing for them. Moreover, marketers need to partner with a trusted and experienced digital team to help them understand what metrics matter for ROI.
Below are three considerations that should be made when determining what metrics you should analyze for showcasing ROI for your campaign:
The overall objective is the first thing to consider for your marketing ROI calculations. Some marketing campaigns have simple goals for campaign measurement such as increasing conversions. If you have the tracking set up for conversions, proving success is relatively easy — your marketing efforts either drove conversions or did not. However, other campaigns may rely on less concrete metrics to prove success, such as raising awareness or building credibility with an influencer campaign. These campaigns will depend on the marketer suggesting how we should measure success — what brand lift study to use, which engagement metrics are most telling, etc. Enlisting a partner who can identify the correct metrics to tie back to your objective is key for measuring the ROI for campaigns.
When setting goals for your campaign, industry knowledge is always key. Be sure to consider the actions that matter for the industry at hand — what actions will act as 'currency' for your client — and develop tracking and tagging that will allow you to collect data for these actions. Another factor to consider is that some industries are easier to define ROI than others. For instance, Entrepreneur noted that the legal and health industries benefit most from digital marketing, with other industries lagging behind in tracking success. Do your research about what metrics are standard among your industry, as this will go a long way toward setting a realistic and achievable marketing ROI goal.
3. External Factors
Though it might be easy to think of your business as existing in a vacuum where the outside world has no impact, there are dozens of external factors that can affect your ROI. For instance, if you're marketing a travel agency, things such as holiday travel, the start of the school year and even geopolitical events can cause massive fluctuations with your monthly and quarterly ROI projections. Factor these external factors into your storytelling deliverables to develop your complete story on ROI.
Though marketing ROI can be more difficult to track for campaigns that are not tracking monetary values — other metrics exist to tell the story of how your campaign is bringing value to your client. Moreover, by taking objective, industry and other factors into account, you can set realistic goals that will guarantee a thorough measurement plan.