Frequently clients ask me to help them develop ROI models and marketing metrics that serve as a foundation for effective decision-making. I’m glad they do, because understanding value returned from marketing investments is essential to a successful marketing effort, and it’s not as easy as it seems.
A sound approach to measuring marketing ROI sits at heart of an agile marketing strategy. There’s no way to make the right choices about where to invest and where to cut back if you don’t know how various activities contribute to your overall results.
Maybe you can measure “everything,” but why would you?
It’s a common misconception that basic ROI calculations can apply to individual marketing activities. To get an accurate assessment of an activity’s contribution to marketing results, you need to start with objectives and measure against those first.
I call this “Return on Objectives,” and it’s the primary checkpoint to determine whether your marketing is working. Whatever the activity, you should have established objectives at the outset. Maybe that was to “generate more leads” or “get the word out about us in the business community.” (One of these is inherently more measurable than the other.)
With the ability to track clicks, leads and purchases online, digital advertising is very easy to measure in terms of ROI. Blogging, community outreach, social media and brand awareness are not. Neither is PR or analyst relations. But you can tell if these things are working if you trace your results back to clear objectives, like “meet with analysts and the top three firms in our industry.”
