5 Ways How to Measure the ROI of Your Marketing Campaigns

Not as simple as it seems, marketing Return on Investment (ROI) needs constant efforts and persistence for your business to stay on track. The term marketing ROI means what it says it does: it is a way of calculating the return on investment from the sum a business disburses on marketing.

It is a financial ratio used to determine how much an investor will profit compared to the cost of their investment. Meaning the advantage accrued increases as the ratio rises. Moreover, marketing ROI is among the crucial financial metrics for gauging the performance of marketing executions. Marketing teams  that their efforts are paying off for the firm when revenue can be directly correlated to marketing action, depending on their approach, intermediaries, and business pursuits.

After all, the projects with a better return on investment will probably be repeated. Yet, those with a lower return on investment or a defeat for the organization should be modified or abandoned. Therefore, concrete study, cohesive planning, the right platforms, fitting marketing analytics, and consistent goal improvement always matter.

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The Basic ROI Measurement Formula

You must know how much you spent on a project and the amount you earned to measure marketing ROI. The following elements might be comprised in your budget, counting on the methods and system of your campaign:

  • Generation of organic content
  • Advertisements on social media
  • Platforms and resources for marketing

After considering such factors, you need to understand the marketing ROI formula. Remember that there are many ways to compute the ROI. But the formulas presented below are the most commonly used by marketers and industry professionals.

ROI Formula


  • ROI = Net Income / Cost of Investment x 100  (b)  ROI = Investment Gain / Investment Base

(c) Digital Marketing ROI = (Sales Growth – Marketing Cost) / Marketing Cost.

The most widely used ratio is the first iteration of the ROI formula, which is net profit divided by the expense of investment times 100. The simplest method to understand the ROI calculation is to divide the “benefit” by the “expense.” You can use this when assessing whether your project’s turnout is a success or not.

The second formula will most likely assess the investment gain over the base. This is prevalent among investors who acquire property and make big purchases. For example, Property A, which has a value of $500,000, is purchased by an investor. The investor sells the property for $1,000,000 two years later.

The benefits of using these formulas are that they are (a) easy to understand and calculate due to their clarity. There are just two numbers needed: the gain and the expense. (b) the formulas are generally acknowledged since investment return is a concept that practically everyone can understand.

Moreover, in the digital marketing ROI, You must determine the following to measure the marketing ROI  marketing ROI formula:

  • How many individuals became leads?
  • How much money did you spend on developing and publicizing the marketing campaign? Everything is included here, the team’s salary, content and boosting, and all you have employed for your marketing initiative.
  • What proportion of leads are converted to actual clients?
  • The typical cost of your product is the average sales price. An average can be helpful if you occasionally offer discounts or change pricing in various ways.

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How to Easily Track and Measure the ROI of Your Marketing Campaigns

Furthermore, ROI in marketing can seem challenging. Therefore, whatever marketing method you use, you must keep an eye on the following indicators will help you assess whether your campaigns are indeed efficient:

1. Understand and Assign Attribution Models

The majority of marketing teams want to employ attribution marketing techniques to understand the success of their marketing efforts, according to Pyxl’s 2021 Digital Marketing Survey Report (2021).

But what is attribution in marketing? The evaluation of the marketing touchpoints of a consumer experience along the way to purchase is known as marketing attribution. That’s why it is essential to identify the messages and channels that impact the customers’ decision to convert or take the desired next step.

By understanding the attributions, you can efficiently optimize marketing spending, allowing the company to alter or fix the budget accordingly. This point can also help increase the ROI since it enables marketers to connect with the audiences who matter, at the perfect time, by disseminating the most suitable message, which can lead to an increase in conversions or even way higher marketing ROI.

Now, more than understanding, you must also familiarize yourself with the suitable attribution models you can use. More than 77% of marketers deem losing control over their brands because of inappropriate attribution models. To further know the different attribution models, you can read more here and learn what marketers do to ensure they correctly measure their initiatives’ ROI.

2. Create UTM Tracking URLs

UTM (Urchin Tracking Module) codes contain text snippets counted to the end of the URL to assist you in tracking where website traffic derives. UTM codes facilitate you to accurately analyze each campaign’s, platform’s, or medium’s ROI.

Most marketers alter this text to fit the site where the URL is linked to ascribe the campaign’s performance to particular pieces of content due to their ability to “delineate” website traffic back to its source.

Simply put, creating a UTM code can demonstrate how much traffic originated from Facebook, other social media platforms, or even a specific post online.  The following UTM factors or parameters are essential for you to remember and look into: Campaign, Source, Medium, Content, and Term.

In creating UTM tracking URLs, always remember the following:

  • Make sure your URLs and hyperlinks are clear, concise, and understandable.
  • Secure the URL UTM parameters, so your tags will accurately describe what and where you are tracking.
  • Use only lowercase or uppercase letters because UMT codes are known as case-sensitive.
  • To better understand your bottom line, integrate UTM monitoring with your CRM.

3. Make Use of Digital Tracking Pixels

In this marketing ROI measurement, you need to use digital tracking pixels as your main instrument. These digital tracking pixels are components you may be putting into your website to monitor where your visitors originate and how you can later utilize remarketing to target those users. These technologies work well for tracking website activities, including transactions.

According to James Cowley, a digital strategist at an entertainment marketing firm in Nashville, “to be capable of measuring ROI through any online platform, your website must be set up with all of the right digital tracking pixels, including Facebook Pixel or Google Analytics.”

Hence, these digital tracking pixels and other ways around this metric can help you identify the people staying on your website, where they know you, and how you can connect them with other advertising below the line.

4. Use CRM Tools

A tool known as Customer Relationship Management (CRM) is used to handle all interactions and connections between your business and its clients. Here, your objective is apparent: to strengthen business ties. With the help of these tools, you can identify sales opportunities, manage marketing campaigns, store contact information for customers and prospects in one convenient location, and track customer service issues.

CRM software, like HubSpot, aids follow leads from initial contact through the completion of the purchasing process. The best approach to determine how many chances your digital marketing investment is producing for your company is to use CRM software to monitor leads made by the digital marketing campaign and tag them as such.

You may also assess the value of your digital efforts using the information gathered from these strategies, regardless of whether your chosen key performance indicator is a higher conversion rate or improved brand awareness.

5. Add Multiple Conversion Points on Your Website

The most decisive leverage factor for any company is conversion. However, conversion isn’t that simple. Just keep in mind that not all of your guests will purchase their first visit if they go directly to your “Product Pages” and click the “Buy Now” button. Thus, maintaining visitors to your website long enough for conversion is key.

That is why, in this portion, you must offer many conversion points on your website and measure each visitor’s progress separately. For a content marketing campaign or soft selling method to be successful, it needs to have several conversion points. Each conversion point represents a step toward the ultimate sale or referral, making them excellent tools for assessing how well content connects with the intended audience.

For instance, if you use video content to entice visitors to your website in the first place, you may decide to advertise online and send out email newsletters for a more intimate notice. Here, the presence of content variations can always lead them back to your site.

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How to Improve Your Digital Marketing ROI

There are many ways to develop and improve your digital marketing ROI. Aside from understanding how you will track them, it would help if you also found suitable approaches to elevate your content and goals to entice more people to your website, purchase, and join your campaigns.

Here are some tips on how to build on your digital marketing ROI.

1. Establish Goals for Your Campaigns

Setting defined ROI goals is, once more, the first step toward enhancing ROI. These ought to be customized for each element of your marketing plan. You may seek tactics and advice to increase your ROI after fully forming your campaign goals. You might go for an audio-visual promotion, social media content, pay-per-view, subscriptions, and more.

In the end, investing in advanced analytics can also help you to obtain detailed expenses and profit breakdowns. It can offer predictive modeling that will enable you to better time your spending and eventually get the most out of your marketing expenditures. Hence, it would be best if you start by asking yourself, “what do I want to achieve from this campaign?” and everything will surely follow.


2. Monitor Your ROI Metrics

Most marketers are inclined to concentrate on vanity metrics, whether they are doing sponsored or organic marketing. However, vanity metrics, as their name suggests, can appear exciting, but in truth, these are meaningless measurements that provide you with no helpful information regarding the success of your campaign.

That is why the best ROI metric for you to monitor continually boils down to your campaign objectives. For instance, the number of followers is a crucial campaign metric if your goal is to expand your audience. For social media ads, the number of engagements, including the share, views, and reactions, are the main determinants of whether your campaign reaches the right audience.

You can boost ROI by knowing which signs to pay attention to and which indicators to disregard. Typically, the primary campaign KPIs should align with the goal of your business. Remember, it is possible to track many metrics for a single initiative. Just ascertain each one is relevant to your intent.

3. Experiment With New Channels

Your brand doesn’t need to be present on every digital marketing platform. Yet, you can lose out on many leads and sales if you only utilize two channels. So, what should you do now?

You must be open to taking risks and finding additional sampling channels to increase your ROI. If you solely use Facebook, for example, you might have missed the power of other platforms like Twitter or Instagram to help you develop your brand. Or, if you exclusively use free digital media, a paid approach could seriously boost your sales.

You must know where your audiences are and what they are doing there. Then, find out the user demographics each social media platform tends to draw.

Additionally, you can do competitive research to find out which channels are being used by other enterprises in your industry. Consider adding YouTube, LinkedIn, and TikTok to your social media plan, for instance, if your competition is gaining many followers.

Besides, you can also learn new strategies for boosting sales, cutting expenses, and improving ROI. Here are a couple of deals to check out and contrast with industry standards:

  • Free delivery
  • Time-limited specials
  • Limited-edition goods
  • Discounts for subscribers
  • Special deals for faithful clients

4. Make Use of Automation Tool

You can reduce the amount of manual work your team undertakes to be one of the effective techniques to cut costs. Now, if you are asking, “what is the solution?” The answer is simple: Make use of available automation tools around you.

Aside from cutting expenses, you can also spend less time on marketing initiatives if you have fewer repetitive activities to complete. For instance, if you are trying to craft a graphic design for the whole month as part of your campaign, you can leverage remove BG to do the work for you with a click of a button.

Suppose you are trying to bring out various creative executions. In that case, you can try numerous marketing tools to have a more impactful and hassle-free production of materials for your marketing initiatives. Apart from that, you can also try an automatic reply feature suitable for Facebook and other websites. For example, you may easily manage discussions alongside DMs in your Facebook inbox, where they show up if you use Facebook plugins and different setups.

5. Always Improve Your Strategies

Along the way, you will encounter potential clients who might not react to your campaign as planned. The ROI from your organic and paid efforts may consequently decline as unexpected. That is why it is essential to look after what you are doing and not miss a thing in every phase: from conceptualization to production and implementation. Always review your messages on social media, check your email content, monitor your website traffic, and try SEO strategies and other marketing tools online.

Do not forget to look through consumer feedback and communications to get a sense of the behavioral patterns of your target market.  After that, revise your material to speak to clients in a way that will be more efficient and profitable.  Always include calls to action as well, which urge the audiences to take action. Remember that there are numerous ways to improve your overall plans and strategies.  Do not settle for less, and do not be afraid to take new steps.

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You can take actions to increase ROI in marketing, from monitoring the appropriate data to testing new strategies. You can keep raising this parameter for your business’s or clients’ clients if you track ROI, pinpoint areas for development, master marketing analytics, and test out fresh approaches over time.

Finding the best metrics, even the bad, and taking action to improve them is one of the best approaches to increasing ROI. You must comprehend your customers’ route before purchasing to spot areas needing modification and constant improvement. Go out of your comfort zone and start measuring your ROI and assessing them. You can’t really tell what will happen next if you remain stagnant and on a linear path. After all, marketing success always awaits those thirsty to learn and grow.

Author bio

Yen Pedrajas, Removal.AI

Yen is a content writer for Removal.AI, an image background remover tool. She is a digital marketing and eCommerce enthusiast who loves to write and share new insights about marketing, eCommerce, and growth-hacking tips for startup businesses.