How Do You Measure Marketing ROI?

On the surface, marketing ROI sounds like a pretty straightforward metric: Did the money you spent on marketing generate more money for the organisation?

There’s even a (relatively) simple formula to help you calculate your marketing ROI:

Marketing ROI = (Revenue attributable to marketing – Marketing cost) ÷ Marketing cost × 100

But that’s where the simplicity ends. Because working out exactly which revenue marketing contributed to – and what even counts as a marketing cost – can make things a lot more tricky.

For example, a customer might see an ad, find you again through ChatGPT, read three articles, attend a webinar, and finally respond to an email you sent six months later. So, which activity gets the credit?

Accurately measuring marketing ROI means looking beyond the percentage and understanding how marketing makes a difference to the stuff that actually matters to your business.

What is marketing ROI?

In its simplest form, marketing ROI is the financial return generated by your marketing, relative to what you spent to achieve it.

You can calculate ROI for your entire marketing function or drill down into a specific channel, campaign, or marketing activity. No matter what you’re measuring, the important word here is “return”.

Marketing platforms give us no shortage of numbers to report. Impressions, clicks, engagement rates, website sessions, and leads can all tell you something useful about performance. But they don't necessarily tell you whether your marketing delivered commercial value.

ROI connects marketing activity with a financial outcome.

That makes it particularly useful when you're deciding where to invest your next marketing dollar (or figuring out where the rest of your spend disappeared).

How do you measure marketing ROI?

A formula is only as reliable as the numbers you put into it. Before reaching for the calculator, work through these five steps.

1. Define exactly what you're measuring

First up, figure out the ‘what’. Are you measuring an individual campaign, a particular channel, a specific customer segment, or the performance of your marketing as a whole? It’s crucial to get clear on this before jumping ahead to the question of ‘how much’.

Next, establish the timeframe and objective. A three-month lead generation campaign shouldn't be assessed in the same way as an ongoing brand program. Understanding the purpose of the activity and its goals over time gives you a much better foundation for deciding what a successful return really means.

2. Calculate the full marketing investment

It might be tempting to look at your $10,000 media budget and call that your investment. Alas, things are rarely that simple in the world of marketing.

Depending on what you're measuring, relevant costs might include:

• Media spend
• Agency or contractor fees
• Creative and content production
• Marketing technology
• Events
• Internal resources

Leaving significant costs out of the equation might make your ROI look fantastic, but the true story won’t be quite as rosy. Only with a realistic view of the costs involved can you build an accurate picture of the value your activity delivered.

3. Identify the business outcome that matters

For some organisations, the obvious outcome is sales revenue, but this isn’t the case for every business.

A B2B company might be primarily interested in qualified pipeline or customer acquisition. Meanwhile, a not-for-profit might care about donations, memberships, or another action that supports its mission. Choose an outcome that reflects what the marketing activity was actually designed to achieve.

What if the outcome doesn’t have an immediate dollar value? In this scenario, you may need to track marketing’s contribution towards the outcome rather than forcing it into an ROI calculation. A qualified lead or membership application, for example, can still demonstrate marketing’s impact – even if it doesn’t translate into revenue straight away.

4. Connect marketing activity to the outcome

And now for the question of attribution (AKA the source of spreadsheet-induced headaches for many marketers).

Attribution determines which marketing interactions receive credit for a conversion. Three common approaches are:

• First-touch attribution: Gives credit to the first recorded marketing interaction.
• Last-touch attribution: Gives credit to the final interaction before conversion.
• Multi-touch attribution: Distributes credit across multiple interactions in the customer journey.

The right model depends on how your customers typically find, evaluate, and buy from you. If several marketing interactions routinely contribute to a conversion, relying entirely on last-touch attribution could significantly undervalue the activity that created or nurtured the opportunity.

5. Calculate your ROI – then add context

Once you've established your return and investment, you can apply the marketing ROI formula we shared in the intro. But don't stop at “Campaign A delivered 180% ROI”.

Compare results across campaigns, channels, and time periods to identify patterns. Look for changes in ROI and consider whether apparently low-return activities are contributing to results elsewhere.

A single ROI percentage is a useful data point, but you need more context to understand what’s actually working (and isn’t) in your marketing activity over time.

Why is marketing ROI so difficult to measure?

Marketing ROI is notoriously slippery to pin down. This is especially true in the world of B2B marketing, where you’re often dealing with:

• Lengthy buying cycles
• Multiple touchpoints
• Offline sales conversations
• Incomplete CRM data

All of which make measuring your marketing ROI distinctly more difficult.

Then there's the complex question of causation. If revenue increases while a campaign is running, did the campaign cause the increase? Or did pricing, seasonality, sales activity, competitor behaviour, or another factor play a role?

Finally, there's the danger of making immediate ROI the only metric that matters. Focusing too heavily on this can lead you to only optimise the stuff that’s easy to attribute, while ignoring the activity that actually creates future demand.

A neat ROI calculation doesn’t always reflect true long-term value.

What is a good marketing ROI?

If you were hoping for a nice, tidy percentage here, we’re sorry to disappoint.

A “good” marketing ROI depends on all kinds of factors: your margins, industry, sales cycle, customer lifetime value, channel, objectives, and stage of growth, to name a few. A campaign delivering a return that looks excellent for one organisation could be unsustainable for another.

So, rather than chasing an arbitrary industry number, establish benchmarks based on your own historical performance, objectives, and profitability goals.

How can you improve marketing ROI?

Spoiler: the answer isn’t “spend less”.

Start by finding the biggest gap between investment and results. That might mean a campaign generating plenty of leads that rarely convert, an expensive channel attracting the wrong audience, or a landing page losing people just before they take action.

Then focus on the things you can improve. Try different messaging, creative, or offers. Make it easier for people to take action. Shift more of your budget towards the marketing that’s delivering results, and find ways to get more mileage from content and other assets you’ve already created.

And don’t assume cheaper always means better. Spending more to attract customers who buy more or bring greater value to your organisation can deliver a better return than generating lots of low-cost leads that never go anywhere.

Can a marketing agency help me improve my marketing ROI?

Well, call us biased, but we’d answer a resounding “yes”. And with valid reason.

A good marketing agency provides an expert view of where your budget, strategy, and execution could be working harder. That might mean spotting critical gaps in your customer journey, identifying underperforming channels, improving conversion points, or finding golden opportunities you're currently missing.

By combining this with just the right mix of channels, content, creative, and campaigns, a marketing agency can help you make much more strategic decisions about where your budget ends up.

If that sounds like something you’d benefit from, we’d love to work wonders for your marketing ROI. Get in touch with our friendly team to find out how we can help.

Marketing ROI: FAQs