The pressure from CEOs and boards<\/a> will only increase, as they demand to see marketing investments produce business results and a measurable return. Marketers need to highlight the value we bring to our organizations and present marketing as a strategic financial asset, with strategic business value that executives can understand in their own terms.<\/p>\n Solving the challenge of Marketing ROI does not have to be rocket science. The first step is simply in committing to measuring it. In this article we\u2019ll cover the challenges, considerations, and approaches you can take right now to solve the marketing ROI challenge.<\/p>\n Since marketing is such a varied field, there are a gazillion obstacles that affect the smooth execution of every campaign. The most common challenges in proving ROI on your marketing include:<\/p>\n Calculating return on your marketing investment (ROMI) is something of an art form. Unlike capital investments, which have a fixed, upfront cost and clear results, marketing investments evolve over time and have both empirical and intangible results that are tricky to quantify. Many marketers struggle with measuring marketing ROI due to following reasons:<\/p>\n All these may sound daunting – but creating a strong strategy for long-term growth and sticking to it will give you the best chance of an increase to your ROMI.<\/p>\n Your strategy and process can make or break your efforts. If executed well, you can get a good return on investment (ROI) for each and every marketing campaign you run.<\/p>\n Overcoming these challenges does not require an MBA in Finance, huge investments in technology, or a whole new team.<\/p>\n According to a global survey conducted by programmatic marketing and analytics firm DataXu, this is the greatest challenge marketers currently face.<\/p>\n Over two-thirds of marketers surveyed say developing a deeper understanding of marketing technologies is critical to their marketing ROI and success. Further, 41% of global marketers and 37% of U.S. marketers said the biggest challenge facing their organizations is developing an efficient marketing mix across channels and platforms to deliver the best marketing ROI possible.<\/p>\n But a common roadblock they face in doing so is poor visibility into their metrics to identify\u00a0what is working and isn\u2019t, making it extremely difficult to measure the effectiveness of each channel. Some of the marketers surveyed attributed this challenge to the number of marketing technology platforms and vendors they need to manage. For many, they are working with ten or more platforms and vendors across the martech landscape, which makes it difficult for marketers to get a unified measurement.<\/p>\n The president and CEO of DataXu Mike Baker also thinks the measurement problem is caused by the \u201cwall gardens\u201d many companies have built around their channels. Digital platforms\u00a0like Facebook and Google may be able to offer marketers better customer insights into how their marketing is performing within each wall garden, but the problem for marketers is that these platforms cannot measure one another.<\/p>\n Without a unified measurement across these different walled gardens, marketers do not have a way to effectively measure and compare their marketing investment and ROI.<\/p>\n Can your business answer the question: \u201cwhat\u2019s the ROI of your Marketing?\u201d<\/p>\n Warning! Math ahead: The answer is as simple as measuring revenue generated from marketing activities, less the investment you made to generate that revenue, and divided by the investment.<\/p>\n Now I am not a math expert. (In fact, I became an English Literature major in college after taking Finance and Accounting 101 courses.)<\/p>\n But even I can see that what\u2019s interesting about this simple calculation, is that investment shows up twice. This means that for the majority of organizations, all you have to do is get more results from the same budget. Or get the same results with less budget.<\/p>\n This involves making trade-off calculations. And it means canceling programs that don\u2019t produce a measurable return.<\/p>\n How are those banner ads working out for you? What about the sales brochures your team spend a ton of money creating?<\/p>\n If you can\u2019t measure the return on marketing activities, simply stop investing in them. This is why content marketing is so effective. With a relatively low cost (compared to advertising) and a high measurability factor, showing the ROI of content marketing<\/a> is just simple math.<\/p>\n Too often, budgets and marketing plans are simply based on last year (minus some standard percent). Or we look at all the people we have and determine who should have funds based loosely on the priorities those people represent. I have met and spoken to people from companies far and wide who have shared this experience! And this makes me want to scream: Whatever happened to the business case?<\/em><\/strong><\/p>\n Building a business case is hard because it starts by questioning the conventional wisdom. It can mean challenging those above you. But if it is done right, this approach can mean better results and accolades for you and your management team. Higher risk = higher reward. I don’t even believe there are risks. Challenging conventional wisdom in a respectful way can lead to the kind of insights that most people miss. And that can bring huge rewards.<\/p>\n In the marketing strategy post\u00a0I referenced above, I\u00a0mention an old boss. He was the\u00a0marketing leader\u00a0of a former company. I actually followed him on my own career path as he rose through the ranks. He was respected in some cases and in other\u00a0cases he was more feared. I just thought he was smart. And here’s why: if you wanted funding, you had to create a business plan. If you had a new idea and wanted to propose a change in strategy, you had to present a clear and concise business case.<\/p>\n What I am talking about is an actual document, not a series of slides. And the document had to include words<\/em> in complete sentences<\/em> and financial calculations and projections performed by a financial business partner in our company. Sales projections? These had to be validated by the sales folks. Operational dependencies? These had to be agreed to by the Ops folks with the expected costs and required resources identified.<\/p>\n That can all sound very intimidating. And here is what he used to say: I know it sounds like a pain.\u00a0 But it will force you to focus your ideas. And at the end of the process, you may find you don’t have a strong business case. Great! Move on. But if you do, then you’ve not only proven the potential, but also practiced how you’ll sell it to your organization.<\/p>\n So as you finalize your new marketing campaign for each channel, ask yourself if you have a solid business case. Are you solving the harder but more pressing issues faced by your company? Or are you surviving and going with the flow?<\/p>\n So you\u2019ve committed to measuring and presenting ROI for your marketing activities. How do you get started?<\/p>\n Here are some useful strategies that can help you turn efforts into results and ensure a positive return on your marketing investments:<\/p>\n Following the formulas to calculate your ROMI is the first step to understanding what works and what doesn\u2019t. To improve lead generation<\/a> you must know where your marketing efforts are bringing in money and where they aren\u2019t.<\/p>\n While important, measuring your return on investment isn\u2019t just about the formulas and the tangible return – it\u2019s also about the intangible benefits too. Like presenting yourself as a thought leader or improving long-term online growth.<\/p>\nMarketing ROI Challenges<\/h2>\n
![\"Top](\"https:\/\/marketinginsidergroup.com\/wp-content\/uploads\/2023\/09\/top-10-challenges-for-proving-marketing-roi.png\")
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Difficulty in Quantifying Marketing ROI<\/h2>\n
Solving The Marketing ROI Challenge With \u201cSimple ROI\u201d<\/h2>\n
![\"ROI_equation\"](\"https:\/\/marketinginsidergroup.com\/wp-content\/uploads\/2023\/09\/ROI_equation.png\")
<\/p>\nBuilding the Business Case for Your Campaigns<\/h2>\n
![\"Business](\"https:\/\/marketinginsidergroup.com\/wp-content\/uploads\/2023\/09\/business_case2.jpg\" "\\"business_case2\\"")
<\/p>\nStep-By-Step ROMI Calculation That’s Right for Your Organization: An Example<\/h2>\n
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Marketing ROI: Tips, Tricks and Best Practices<\/h2>\n
Define your ROI Measures<\/h3>\n