Maximising marketing ROI starts with defined goals, then the metrics that measure them, then the tools that collect the data. Attribute results by channel in GA4 to see which channels return the most, then reallocate spend accordingly. Consistent monitoring and reporting turns that into a repeatable process rather than a one-off calculation.
Gone are the days in marketing where gut and intuition drove marketing performance. In today’s digital age it’s all about data informing and driving decisions. It’s about accessing your data to inform who your audience is, which channels are working for you, and which are delivering the best results to drive the highest impact on revenue. With an abundance of data floating around, it can be challenging to know which metrics to track and measure, to optimise performance and maximise your return on investment (ROI).
Simply put, it’s about knowing what to measure, how to measure and when to measure. But more often than not, this is easier said than done.
According to Forrester “only 25% of B2C marketing executives indicated that they use data and analytics to demonstrate the incremental value that marketing has on business objectives”. This is a result of the overwhelm marketers and marketing executives often face as a result of the abundance of data available, and in the lack of resources and expertise available within marketing teams, and businesses, to drive improvements through data to inform decisions.
As a marketer or business owner, you can have the best marketing strategy going around, focusing on multiple channels to drive action against your goals and objectives, but without measurement, you have no way to track and understand what is actually working and not working in your marketing. Without knowing this, you’re not able to re-allocate investment, optimise and improve performance, and at the end of the day maximise your return on investment.
If you’re sitting there thinking, “yep that’s me”, or “this is for sure something I struggle with, but I don’t know where to start”. You’re not alone. Tracking marketing performance and measuring ROI is a challenge shared by many marketers and businesses. But it doesn’t have to be.
First step, define your goals and objectives.
Your first step should always be to set clear and defined goals and objectives, both short term and long term. This establishes what you expect to achieve from your marketing activities and provides you with a baseline to measure against. This initial step is the most vital in providing a reference point and structure to improve profits and effectively allocate resources (when we talk resources, we’re talking about marketing investment and your time).
Establish your metrics to measure.
Ask yourself, how am I going to reach my anticipated ROI? You’ve defined your goals and objectives, and now it’s time to define the key metrics you’ll be tracking and monitoring to achieve your goals and objectives. Metrics might include conversion rate, engagement rate, click through rate, cost per lead, revenue per customer etc.
Know your analytics tools.
Once you’ve defined your metrics to measure, it’s time to look at the marketing analytics tools that you’re going to use to collect this data. If you know which tools to tap into, how to use these tools to access the metrics which tie directly to, and measure, your goals and objectives, you can easily identify which of your marketing channels are working most effectively and optimise those efforts to maximise ROI.
Marketing analytics tools provide you with a way to track and measure your marketing performance against your defined objectives. Your defined goals and objectives become the roadmap to define what metrics to measure, and your specific metrics define what tools and platforms are most suitable to enable you to track and measure performance.
While tools are chosen based on the data you are collecting, common tools I often use include Google Analytics, native social media insight platforms, CRM systems, tag management frameworks and UTM frameworks.
know how to calculate your ROI.
To effectively calculate your ROI you need to assign monetary value against your conversions. Our goal here is to understand the return on each dollar invested in your marketing efforts. This is vital to determine and calculate the actual return on your marketing investment. Now this will differ slightly dependent on if you’re measuring a single sale or sales over a period of time. Again, always come back to your objectives to define what you’re measuring and what you’re trying to achieve.
There are serval different ways to calculate ROI, the base formula, which enables you to understand the financial impact of your marketing efforts is quite straightforward:
ROI = (Net Profit / Marketing Spend) *100
For example, if my SMART objective is to increase sales revenue by 30% over the next 3 months. During this time, to achieve this objective, I invested $10,000 into a multichannel marketing campaign which generated $50,000 in sales. Based on my ROI calculation, my return would be 500%, meaning I made $5 for every 1 spent on marketing. Which is a great return, exceeding my objective target.
If you want to take your ROI analysis a step further, which I highly recommend, keep following the below.
Attribute your ROI to your marketing channels.
From here you want to deep dive, and review the channels implemented within your campaign. This will enable you to better understand which channels have returned the highest ROI, better informing future campaigns.
For example, say your channel mix included SEO, Paid Ads, Paid Social and Email channels, with a goal to increase conversion on your website (your owned platform). You would use GA4 in this instance, looking under the attribution section, to analyse performance of each of these channels through to conversion. Taking the marketing spend for each channel, the net profit generated by each channel, and the number of conversions (sales), to calculate ROI by channel. This is also something you can configure directly in GA4 using Google Tag Manager (GTM) to view quickly within the platform or in your dashboards.
Now, remember, your channels may serve different stages of the buyer journey (from awareness through to conversion and retention), therefore your attribution model (how you attribute a dollar value back to a channel) needs to reflect this.
Define your monitoring structure.
To be successful in marketing analytics, a structure approach is key. Having a system and structure in place for continuous monitoring and analysis, means you’re able to understand what’s happening in real time, optimise performance where need, reallocated spend along the way and ultimately improve your campaign to ensure you achieve the objectives you’ve set.
Optimise and improve your performance.
Bringing each of these steps together enables you to invest in high performing channels, adjust your approach based on what’s working and not working, to ultimately make more informed decisions, optimising your marketing strategies and drive your marketing performance forward.
Report and communicate.
Without clear communication, no one knows what’s happening. It’s important to develop a data led culture, which means regular reports and communication on the ROI of your marketing efforts is vital. Clear and concise reporting helps demonstrate the impact that marketing has on your company’s bottom line.
To sum this up, measuring your ROI helps you:
- justify marketing spend,
- distribute marketing spend, and
- measure the success of your campaign while establishing baseline performance to inform future campaigns.
If you’d like to better understand how I can help you and your business to better track, measure and optimise your ROI, join our 4 -week online program, The Marketing Review
