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Why Marketing ROI Is Hard to Calculate (and What You Can Do About It)

Marketing ROI is difficult to calculate, but you can come up with a good estimate.

In the marketing world, return on investment (ROI) is arguably the most important metric you’ll need to calculate. It tells you how much revenue your campaign has generated in comparison to how much you spent on it. It can inform you which campaigns are most efficient, and help you decide where to spend your money in the future.

When simplified, marketing ROI is easy to understand; you simply determine how much a campaign brought you and compare it to how much you spent. But there are several factors complicating this equation, making it difficult to calculate:

  • Labor costs. It’s not hard to estimate the cost of a campaign if an external marketing firm is doing all your work for a fixed monthly fee, or if most of your spend is directing toward paid advertising. But what if you and your employees are investing hours of time into a campaign? This can make it difficult to accurately calculate your costs, unless you keep track of every minute you spend and break it down by average hourly rate (but this, in itself, is time intensive).
  • Secondary campaign benefits. You can also run into trouble calculating the benefits of a campaign. You can measure things like conversions and site visitors, but how can you measure brand visibility? How can you determine the impact of a campaign on your overall reputation? These are harder to objectively determine, yet are important for your bottom-line considerations.
  • Short-term vs. long-term effects. Some campaigns are optimized for long-term results, which means your initial measurements of ROI are going to be misleading. This makes it extraordinarily difficult to compare two unlike campaigns.

And these are just the beginning. Unfortunately, calculating ROI precisely is difficult (if not impossible). However, ROI is still useful as an estimate—especially when you’re comparing your campaigns apples to apples.

If you’re interested in calculating the ROI of your campaign or refining your marketing strategy, contact Quez Media for a free consultation today!

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