What Is An ROI Report?
Return On Investment is a performance measure that evaluates the efficiency or profitability of an investment. Measuring marketing ROI helps in validating your most recent efforts and informs future work.
Without an ROI report, a business cannot understand whether marketing campaigns are profitable.
Proving the profitability of your marketing campaign helps to define which strategies work best according to your budget, audience and other factors.
ROI Report Key Takeaways
- To calculate marketing ROI, you need to know which digital marketing metrics to use.
- If your ROI is positive, you are on the right track. If you get a negative ROI, you need to re-evaluate your marketing strategies
- Calculating return on marketing investment measures the degree to which marketing efforts contribute to revenue growth.
- The rule of thumb for a marketing ROI is typically a 5:1 ratio. Anything below a 2:1 ratio is considered not profitable.
Understanding How ROI Report Works
Calculating the marketing ROI helps guide business decisions and optimizes your marketing efforts.
Marketers calculate and use the ROI to justify the marketing spend at the executive level. Therefore, the marketing executives will allocate the marketing budget based on the ROI report.
Measuring marketing campaign ROI uses various digital marketing metrics and key performance indicators to determine the value. Examples of marketing KPIs to use when calculating ROI include:
- Conversion rate
- Cost per lead
- Customer lifetime value
- Brand awareness
Real World Examples Of How Brands Measure and Report ROI
1. How Harris Teeter Acquired 15K New Customers
Harris Teeter Supermarkets Inc is an American grocery and pharmacy chain based in Matthews, North Carolina.
The grocery chain wanted to boost visibility in social media. Considering that grocery businesses have a razor-thin profit margin, there wasn’t much room for error.
The digital marketing experts started by testing a variety of different ad creative’s, targeting segments, and various ad placements.
An ROI report helped the digital marketing experts to find the best combinations that ensured the most visibility in terms of the social media fan base. Geographic ad targeting and optimized cost per mile bidding proved to be the best strategies.
Ultimately, the marketing experts managed to drive 15,000 people to the Harris Teeter stores with a single campaign. Besides, the supermarket chain realized a double Facebook reach within six months.
2. How Augean PLC Increased Traffic 10% Year Over Year
Augean PLC is a leading waste management company.
They were looking for an effective way to gather market research data and promote specific products. They used ROI reporting to determine the suitable approach.
Based on the ROI report, email marketing and social media marketing came out as the more effective approaches compared to blog posts. The company trained employees on how to best leverage email marketing and social media marketing to create and encourage brand loyalty and return customers.
Implementation of the new strategies saw the company attaining 10% more visitors year over year. The increase was attributed to the choice of improved social media and email marketing efforts.
How To Measure Marketing Campaign ROI
- Define the type of marketing used and the target audience
- Determine the marketing campaign KPIs
- Measure momentum and engagement
- Determine the amount of direct sales revenue the campaign produces
- Calculate the ROI
- Measure campaign effectiveness in stages
- Tie the metrics to lead quality improvement
- Measure the value
Monitoring a marketing campaign requires using proper tools. Some great examples of tools for measuring the marketing campaign include:
Measure your advertising ROI as well as track your Flash, video, and social networking sites and applications.
Businesses using Google Analytics:
Help you understand how the content you share on Twitter grows your business.
- Website: analytics.twitter.com
Businesses using Twitter Analytics:
Manage and schedule posts to multiple social media profiles on Twitter, Facebook, LinkedIn, Instagram, and more.
- Free for 30 days
- Professional: $49/month
- Team: $129/month
Businesses using Hootsuite:
Contributors to this article:
- Pat Walls, Founder @ Starter Story
- David Gitonga, Writer @ Starter Story
Hey! 👋I'm Pat Walls, the founder of Starter Story.
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