What is Marketing ROI?
Broadly speaking, marketing ROI is the monetary return generated by a company’s marketing activities. As b2b marketing budgets continue to rise, companies have become increasingly focused on marketing ROI.
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Another factor in the increased interest in marketing ROI is the shift to inbound marketing. Traditional outbound methods like trade shows and paid ads are now less popular than inbound marketing techniques based around high quality content produced in-house.
With the availability of software that analyses the effectiveness of your content as well and how many leads are generated, companies have sought to measure their digital marketing ROI. Other marketing ROI metrics include contribution to overall pipeline, marketing generated revenue, conversion rates, an lead source details.
One company that has made considerable progress in the area of marketing ROI is Marketo. Marketo’s marketing automation solution now comes with revenue cycle analytics as a built in feature. This functionality allows means users can tie web interactions to revenue.
Why is Marketing ROI Important?
As marketing investments increase, the importance of ROI measurement grows. CEOs and other execs will want to see some quantifiable data that justifies their investment. On the other hand, marketing leaders also want to be able to present data that clearly demonstrates the contribution of marketing to the overall success of the company.
Marketing ROI Pros and Cons
While the ability to demonstrate marketing ROI is clearly a positive, there are a number of issues that arise when trying to set up a marketing ROI calculator. After all, marketing is both art and science making the math to determine its success somewhat evasive.
Another issue that can cloud ROI is the attribution of a prospect who passes through a number of touch points before becoming a customer. Should attribution be given to the initial campaign that caught the buyer’s attention or should you look to employ a multi-touch attribution system which divides credit along the marketing channel. This issue usually crops up as teams look to measure the ROI on a particular campaign but is indicative of the stumbling blocks companies face on the road to accurate tracking of marketing ROI.
Another difficulty companies encounter concerns content. Content investments have increased considerably to the point that they now count for as much as an average of 16% of overall b2b budget. Unfortunately, research form the American Marketing Association has found that 90% of marketing-produced content goes unused by sales. Traditional file and folder content infrastructures are unsuited to the high volumes of content being produced. Meanwhile reps have no way of knowing which pieces of collateral are associated with winning deals and work off their gut feeling instead.
Marketing ROI Tips
While ROI can be difficult to calculate, it does no mean your company should not strive to get as accurate a picture of ROI as possible. ROI can be an extremely useful to inform your marketing decisions. At Docurated we follow a number of Marketing ROI best practices.
- Leverage Content Analytics: Your marketing strategy will undoubtedly be powered by your content investment. Look to sales enablement software that provides your team with detailed analytics around content usage as well as its association with winning deals. Armed with this information, you can quickly refine your marketing strategy to ensure only the most powerful content is presented before prospects. You will also be equipped with data to clearly demonstrate content marketing ROI to the executive team.
- Test Regularly: Continually testing your marketing tactics can boost your ROI. To boost conversion rates you might develop two types of landing page design. After a period of testing, you will only use the page that converts at the higher rate.
- Take Advantage of Free Analytics Tools: Free tools like Google Analytics offer some great insight into the success of your online efforts. Google Analytics can help determine the success of your SEO strategy, while other paid tools let you view your impact on social media.
- Tie all your Efforts to Revenue: With so much data available to measure your marketing efforts, it can be easy to get overwhelmed. Remember, revenue is your main concern. While conversion rates on each of your landing pages, social media shares, likes, and impression can help to inform your marketing strategy, they are all secondary to revenue.