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Derek Bryan

2 min read
14.11.2018

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Table of Contents

The 5 Most Common Mistakes in Calculating Marketing ROI

Don’t make these critical mistakes when estimating your ROI in marketing.

Your marketing ROI (return on investment) is the single most important metric to understand for the health of your campaign. Essentially, your ROI is a measure of how much revenue you’ve generated, compare to how much you’ve spent on a campaign. If it’s positive, you can consider the campaign a success. If it’s negative, it needs work.

Unfortunately, the actual ROI calculation is typically more complicated than this brief explanation can suggest. Most marketers end up making these five critical mistakes:

  1. Neglecting ROI entirely. Some marketers don’t even bother to look at ROI. They might look at bottom-line results, or trust their instincts that the campaign is working. But if you aren’t objectively measuring your results and comparing them to the costs you put in, you’ll never have a true idea of the health of your campaign.
  2. Failing to incorporate labor costs. Ad placement and retainer costs are easy to calculate, but it’s easy to neglect labor costs—or how much you’re paying your employees to manage those campaigns. Without this key piece of information, your formula will probably be off.
  3. Comparing apples to oranges. What are you comparing your ROI to? Different campaigns yield different ROI percentages, and companies of different industries may see very different results. Make sure you’re comparing ROI figures with as few differentiating variables as possible if you want to draw meaningful conclusions; for example, compare the same campaign’s return, year over year.
  4. Failing to incorporate intangible benefits. Your return isn’t just about how much new business you got directly from the campaign. You also need to consider less tangible factors, like how your brand awareness or brand reputation have changed.
  5. Making the call too early. A negative ROI doesn’t mean you should abandon a campaign altogether—in fact, some marketing strategies almost always begin with a negative ROI, gradually ramping up to a more positive one. Always consider your results in context.

If you need help calculating the ROI of your current marketing strategy, or if you’re interested in trying something new, make sure to contact us today!

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