Published: April 2, 2025

How to Measure and Improve Your Digital Marketing ROI

Digital marketing ROI is a metric that measures a digital marketing campaign's return on investment (ROI) — or how much profit your digital marketing efforts generated. Keep reading to learn more about ROI in digital marketing, including how to measure and improve yours!

Use ROI Calculators View Marketing Services

What is digital marketing ROI?
How to calculate ROI in digital marketing?
What’s a good digital marketing ROI?
Which metrics should you track to measure ROI?
How to track digital marketing ROI with GA4?
Tools for tracking ROI
How to improve digital marketing ROI?
FAQs
Improve your Internet marketing ROI with WebFX

Tracking your return on investment (ROI) is essential for success with any marketing initiative. Measuring your digital marketing ROI enables you to determine what’s working and what you can change to improve your results.

Want to see better returns from your marketing efforts? Let’s go through these topics:

What is digital marketing ROI?

Digital marketing ROI is a measurement of your online marketing campaign’s profits or losses, which you calculate with the following formula:

ROI = (Net Profit / Total Digital Marketing Costs) x 100

Measuring your ROI for digital marketing helps you determine the effectiveness of your strategies.

How to calculate ROI in digital marketing?

Calculating digital marketing ROI means comparing the revenue your campaigns bring in with the money you spend on them.

This section covers the standard formula, two alternative methods, and examples for PPC, SEO, and other major digital marketing channel.

Digital marketing ROI formula

The formula for calculating ROI is:

ROI formula

Use the formula by estimating your total digital marketing costs and net profit. Then, divide the net profit by those costs. Multiply the product by 100, and you’ll have your ROI!

Example of calculating digital marketing’s ROI

Here is an example of how to calculate digital marketing ROI with the above formula:

Total Digital Marketing Costs: $5,000
Revenue: $30,000
Net Profit: $25,000 (from Revenue – Total Digital Marketing Costs)

You’ll then have the following formula for measuring your ROI:

(25,000 / 5,000) x 100 = 500

The result is an online marketing ROI of 500% from your efforts.

An alternative to using a percentage is expressing your ROI as a ratio. To do this, divide your net profit by your cost. That number is your ratio compared to 1. So, for the above scenario, you would divide $25,000 by $5000 to get 5.

Your ROI ratio would be 5:1, or $5 for every $1 spent.

Alternative options for calculating ROI in digital marketing

The traditional digital marketing ROI formula doesn’t work for everyone! Sometimes, marketers don’t have quick access to net profit data or need to provide forecasts to leadership before receiving approval for a specific strategy.

In these instances, we recommend these alternatives for calculating Internet marketing ROI:

1. Forecasted ROI

The formula for calculating forecasted ROI is:

Forecasted ROI = ([Forecasted Return – Marketing Costs] / Marketing Costs) x 100

Let’s use this formula in this example:

Forecasted return: $30,000
Marketing costs: $5,000

Forecasted ROI = ([30,000 – 5,000] / 5,000) x 100

(25,000 / 5,000) x 100

(5) x 100

Forecasted ROI = 500%

2. Forecasted ROI for lead generation

If you want to predict your ROI from your lead generation efforts, you can use this formula:

Forecasted ROI for Lead Gen = (Forecasted Number of Leads x Average Lead-to-Customer Rate x Average Sale Price)

Now, let’s use this formula with this example:

Forecasted number of leads: 25
Average lead-to-customer rate: 50%
Average sales price: $1,000

Forecasted ROI for Lead Gen = 25 x 0.5 x 1,000

Forecasted ROI for Lead Gen = $12,500

Want to skip the manual math? Use our digital marketing ROI calculator to see your return in seconds.

How to measure ROI for different digital marketing channels?

Every channel uses the same ROI formula, but the revenue data, the costs, and the right timeframe change from one to the next. Online channels give you a trail to follow, because tools like Google Analytics 4 (GA4) and RevenueCloudFX show which clicks turned into leads and sales.

The examples below use hypothetical numbers. To keep the math consistent with the formula earlier in this guide, they count net profit as revenue minus marketing costs. For a stricter number, subtract product costs too.

Email marketing

Email gives you some of the cleanest tracking, as long as you tag your links. Add UTM parameters to every link, using email as the medium, then view email traffic and key events in GA4. Compare the revenue to what you spend on your platform, design, and copywriting.

Say you spend $500 per month and email-driven purchases bring in $4,000. Here’s the math:

Net profit: $4,000 – $500 = $3,500
ROI: ($3,500 / $500) x 100 = 700%

Judge campaigns by clicks and conversions instead of open rates. Apple Mail Privacy Protection preloads messages, which inflates opens. Tools like EmailMarketingFX can track clicks and unsubscribes for you.

Search engine optimization (SEO)

SEO builds returns over time, so judge it over months and quarters instead of weeks. In GA4, filter for organic search traffic and track key events like purchases, form fills, and quote requests. Add Google Search Console to see which queries and pages drive those events.

Suppose you pay $2,000 per month for SEO and organic search sends 40 leads. You close 20% of them, and each customer pays $1,000. Work through it in four steps:

Customers: 40 leads x 0.20 = 8 customers
Revenue: 8 customers x $1,000 = $8,000
Net profit: $8,000 – $2,000 = $6,000
ROI: ($6,000 / $2,000) x 100 = 300%

B2B companies often close deals offline, so assign each lead a realistic value and confirm it against your customer relationship management (CRM) data.

Pay-per-click (PPC) advertising

Pay-per-click, or PPC, is an advertising model in which you can target search engine users based on the words and phrases they search. The ROI you receive from ads is also sometimes to referred to return on ad spend (ROAS).

Here’s an example of PPC ads on a Google search engine results page (SERP):

ppc advertising example

PPC gives you the fastest read on ROI, since you know your exact spend and can tie conversions to specific clicks. Link Google Ads to GA4 so you see what visitors do after they click, not just that they clicked.

Say you pay $2 per click and buy 1,000 clicks. If 3% of those clicks become $200 sales, the numbers look like this:

Ad spend: 1,000 clicks x $2 = $2,000
Sales: 1,000 clicks x 0.03 = 30 sales
Revenue: 30 sales x $200 = $6,000
Net profit: $6,000 – $2,000 = $4,000
ROI: ($4,000 / $2,000) x 100 = 200%

Don’t mix ROI up with return on ad spend (ROAS). ROAS divides revenue by ad spend, and ROI subtracts the spend first. For the same campaign:

ROAS = Revenue / Ad Spend = $6,000 / $2,000 = 3:1

Content marketing

Content rarely closes a sale in a single visit, so track the steps that lead to one. Watch organic sessions, downloads, email sign-ups, and form fills, then use an attribution model in GA4 to connect them to revenue. The data-driven model spreads credit across touchpoints, so a blog post that started the journey earns credit even when another channel closed the deal.

Imagine you spend $3,000 over a quarter on four articles and a guide, and they generate 60 leads. If 10% close at $1,500 each, the math works out like this:

Customers: 60 leads x 0.10 = 6 customers
Revenue: 6 customers x $1,500 = $9,000
Net profit: $9,000 – $3,000 = $6,000
ROI: ($6,000 / $3,000) x 100 = 200%

Those pages keep producing leads after the quarter ends without new production costs, so the same content can return more the longer it stays live.

Social media marketing

Measure organic and paid social separately, since they answer different questions. For paid social, pull cost per click and conversions from each platform’s ad reports, then confirm them in GA4 with UTM-tagged links.

For organic, track the sessions, key events, and sign-ups that social sends to your site.

Say you spend $1,500 on paid ads and earn 25 purchases at $120 each:

Revenue: 25 purchases x $120 = $3,000
Net profit: $3,000 – $1,500 = $1,500
ROI: ($1,500 / $1,500) x 100 = 100%

Treat likes, shares, and follows as signals, not returns. A follower only adds to ROI once they buy.

What’s a good digital marketing ROI?

In general, an ROI ratio of 5:1 is considered good for most businesses, with 10:1 being excellent. These are general guidelines, but your company’s ROI goals will vary depending on numerous factors.

Graphic showing what a good ROI is

What makes a good marketing ROI for your company depends, in part, on how much it costs you to produce or acquire your products. For most companies, you’ll need a marketing ROI of more than 2:1 to cover the costs of both marketing and producing your products or services.

Companies with higher margins — the costs of producing goods compared to your sales price — don’t need a marketing ROI ratio that is as high as that to break even or return a profit.

Which metrics should you track to measure ROI?

Metrics to track when calculating online marketing ROI

When calculating the ROI of your online marketing efforts, it’s important to track and measure metrics that directly tie to revenue, profit, and other actionable metrics that relate to the goals of your business.

Here’s a look at some useful metrics for calculating Internet marketing ROI:

1. Cost per lead (CPL)

CPL formula

Ad spend / number of attributed leads = CPL

If you’re collecting leads as part of your marketing campaign, you’ll want to calculate cost per lead, which is how much it costs you to acquire each lead.

To determine cost per lead, you can divide your total marketing costs by the total number of leads you gained due to your campaign.

Comparing your cost per lead to what each lead is worth to you will tell you whether you’re getting a positive ROI.

2. Lead close rate

Conversions / number of leads = Lead close rate

Do you know how many of your leads become customers? This metric is known as your lead close rate or conversion rate.

This metric is important because your leads only provide financial value if they close. Determining how many leads you need to close to achieve your ROI goal helps you set goals for your sales team.

It can also indicate the quality of the leads you’re attaining. If you have a low lead close rate, you may want to consider adjusting your targeting to attract better-qualified leads.

Evaluating your lead close rate by channel, device, demographic characteristics, and other factors is also helpful. Segmenting your leads can help you determine which channels and audiences to focus on for the best return on investment.

3. Cost per acquisition (CPA)

CPA formula

Cost of advertising / number of conversions = CPA

Your cost per acquisition is how much it costs you to get a sale. Calculating cost per acquisition will tell you how much you need to make from each sale to achieve a positive ROI.

To calculate this metric, divide your total marketing costs by the number of sales you earned.

4. Average order value (AOV)

AOV formula

Revenue / number of orders = AOV

As you saw in the earlier section about how to calculate online marketing ROI, knowing your average order value can help you calculate your ROI.

You may also want to keep track of your average order value so that you can set goals for increasing it. Even increasing your average order value by a small percentage can result in a significant increase in revenue.

5. Click-through rate (CTR)

CTR formula

Total number of clicks / total number of impressions = CTR

You’ll also want to evaluate your click-through rates (CTRs) for your PPC ads, organic search results listings, email links, and other campaigns.

To calculate your CTR, divide your total clicks by the total number of impressions, which is the number of people who saw your ad or organic search listing.

If your CTR is low, you may need to adjust your targeting or change your copy or design. Higher CTRs tend to correlate with higher ROI.

6. Customer lifetime value (CLV)

CLV formula

(Average annual revenue from a single customer x the number of years someone typically stays a customer) – your cost per acquisition of one new customer = CLV

To get an accurate picture of your ROI, you need to determine your average customer lifetime value (CLV), which is how much a customer is worth to your company over the total amount of time they’re a customer.

Without CLV, if you spend $100 marketing to someone and converting them into a customer, and they make a purchase worth $50, you might think you had a negative ROI. But if they make five $50 purchases over the next 10 years, that’s a very different story.

Keeping CLV in mind can also help you keep your marketing costs down. It costs businesses 10 times more to acquire a new customer than to retain an existing one, and CLV helps you focus on the entire lifetime of your customer relationships rather than just individual purchases.

If you calculate your average CLV, you have a more accurate idea of how much you can spend to acquire each customer while still achieving your ROI goals.

To calculate your CLV, you can use the following formula:

So, if a customer typically spends $100 per year and remains a customer for 10 years, and your cost per acquisition is $200, your calculations would look like this:

($100 x 10) – $200 = $800

How to track digital marketing ROI with GA4?

Google Analytics 4 is one of the best free options for tracking and measuring digital marketing campaigns. However, business-to-business (B2B) organizations will need to work harder to measure ROI if sales happen offline.

GA4 monetization overview report

If you’re not familiar with Google Analytics 4, you can use it to track:

Traffic mediums, like organic search, social media, and paid ads
Traffic sources, like Google, Facebook, or another website
Pageviews
Bounce rate
Online conversions
And more

Essentially, with Google Analytics 4, you can answer questions like:

Where does our website traffic come from?
Which pages get the most views?
Which pages get the most conversions?
What are the demographic characteristics of our website’s visitors?
How do people navigate and explore our site?
How much website traffic do we get each day, week, month, quarter, or year?

You can also use Google Analytics 4 with other tools like Google’s Looker Studio, Bing Webmaster Tools, and our digital marketing platform, RevenueCloudFX.

GA4 Looker report

Looker Studio is a free reporting tool from Google that imports data from Google’s various tools and third-party tools like AdRoll, CallRail, and Bing Webmaster Tools. You can use this free platform to turn your data into visual reports that summarize your digital marketing performance.

How to use Google Analytics 4 for tracking ROI?

Because Google Analytics 4 is the most popular tool for tracking digital marketing’s return on investment (and it’s free), this guide focuses on how to use Google Analytics 4 as a business-to-consumer or business-to-business organization:

Create key events
Choose an attribution model
Select a reporting identity
Add integrations
Use UTM parameters to track campaigns
Build custom collections and reports
Create dashboards to share strategy performance

Let’s go through each step:

1. Create key events

Key events help businesses measure the actions that matter most, like someone:

Joining your email newsletter
Purchasing your product online
Completing your contact form

Use Google Tag Manager to set up event tracking.

GA4 key events view in Admin settings

Then, visit the Admin settings in Google Analytics 4 to mark these events as key events. You can then access key event data in the Advertising, Reports, and Explore sections of Google Analytics 4.

2. Choose an attribution model

You’ll find a few attribution models in Google Analytics 4, including:

Data-driven, which uses machine learning to give credit to various channel touchpoints.
Paid and organic last click, which gives credit to the last channel a user touched.
Google paid channels last click, which gives credit to the last Google Ads touchpoint.

Your preferred attribution model will depend on your organization and typical buyer journey.

Some businesses like the data-driven model because it provides a fuller picture of the user journey. Others like the last click model because it credits a single channel, which can streamline conversations.

3. Select a reporting identity

With Google Analytics 4, businesses have access to additional options for tracking users, including:

Device-based, which references a user’s device ID.
Observed, which references the user’s ID and the device ID.
Blended, which references the user’s ID, device ID, and modeled data.

User ID is valuable for businesses with online user accounts, like an ecommerce store or software provider. Companies without user ID data can still use the observed and blended reporting identity options — they just won’t provide the same value.

Note: You can switch between reporting identities without affecting your historical data.

4. Add integrations

Take advantage of Google Analytics 4’s plug-and-play integrations for:

Integration	Use cases
Google Ads	Create conversions in Google Ads based on Google Analytics 4 key events View Google Ads conversion data in Google Analytics 4 Build remarketing audiences for Google Ads
Google Search Console	Track organic performance against key events Measure which queries and/or landing pages generated key events
Google Merchant Center	Track Google Merchant Center traffic against key events Access key events data in Google Merchant Center

With these integrations, measuring the performance of specific channels is easier.

5. Use UTM parameters to track campaigns

An Urchin Tracking Module (UTM) parameter is another excellent way to track your online marketing results.

UTM parameters include:

Campaign source
Campaign medium
Campaign name

They appear at the end of a URL, like “https://www.example.com/?utm_source=source-name&utm_medium=medium-name&utm_campaign=campaign-name.”

Google offers a free tool for generating UTM parameters (and auto-adding them to your URL), so don’t worry about creating your UTM parameters manually.

With UTM parameters, you can track:

User behavior
Campaign performance
Traffic referrals from other sites
And more

For example, your business could use UTM parameters to track, measure, and organize the traffic that comes to your site through specific initiatives, like email marketing.

You could also track this data down to the individual email sent, which provides you with even more data and insight into your efforts.

The best part is that your UTM parameter data goes to your Google Analytics account, which helps you make Google Analytics your dedicated space for monitoring and measuring your digital marketing campaigns.

UTM parameters require time and organization because you want to ensure accurate tracking and analysis. Working with a digital marketing agency like WebFX gives you all the benefits of UTM parameters without the work.

Your dedicated account manager takes care of mapping, creating, and setting up your UTM parameters. You can then check the data in Google Analytics — or have your account manager analyze and break down the data for you.

6. Build custom collections and reports

Measuring digital marketing ROI is easier than ever in GA4.

GA4 reports library

With Google Analytics 4, businesses can create custom collections and reports for tracking, measuring, and analyzing website performance. For reference, collections contain reports, like a folder containing files.

Some report examples include:

Tracking specific traffic sources, like email, and user behavior
Measuring before/after performance, like for a website redesign
Monitoring certain site sections and/or URLs, like transactional vs. informational URLs

For the best results, use custom reports to explore and analyze data. Then, use Looker Studio to summarize this data for stakeholders (Looker Studio has a built-in connector for accessing Google Analytics 4 data).

7. Create dashboards to share strategy performance

Digital marketing brings your business a lot of data, especially when you have tracking mastered.

The problem, however, is working through all that data to:

Determine ROI
Find opportunities for improvement
Discover which strategies perform best

That’s why businesses use dashboards.

Digital marketing dashboards serve as a handy tool for tracking and summarizing your digital marketing performance. They compile all your data into bite-sized chunks that offer quick answers to the questions decision-makers ask most, like:

Which channels drive the most leads, sales, or revenue
What is the ROI of our different marketing channels?
What is our website’s overall conversion rate?
Which pages have the highest conversion rates?

You can often customize your dashboards, too, which can help you focus on the online marketing metrics, channels, and actions that matter most to your company.

While you can use Looker Studio to create your business’s marketing dashboards, it’s a time-intensive process to build your dashboards and organize your data. Keep in mind that if you import a significant amount of data, Looker Studio can become sluggish.

That’s why companies will generally invest in a marketing platform that includes reporting dashboards, like RevenueCloudFX.

RevenueCloudFX is handy because it compiles all your marketing data, from search to email to social, in one place.

In addition to a main dashboard that summarizes your efforts, this proprietary and AI-powered software also provides specific dashboards for each channel.

Dashboards make your life easier.

You can instantly show teammates and company leaders how a strategy, like content marketing or email marketing, impacts your bottom line.

Tools for tracking ROI

Most marketers use Google Analytics 4 or a similar platform to track and evaluate their digital marketing efforts. If you don’t use Google Analytics 4 (or a comparable platform), we recommend that you start to get a better understanding of the value of your campaigns.

Customer relationship management (CRM) software like Nutshell is also a handy tool to tie your marketing efforts with your sales results, giving you a full picture of your ROI.

Below is a table that summarizes their use cases:

Platform	Use cases	Price range
RevenueCloudFX	Website analytics Call tracking Lead tracking Lead scoring Lead management Third-party integrations Offline and online ROI tracking	$
HubSpot	Website analytics Lead scoring Third-party integrations Online ROI tracking	$$
Cyfe	Third-party integrations Custom dashboards Online ROI tracking	$
Marketo	Website analytics Lead tracking Third-party integrations Online ROI tracking	$$$
Google Analytics	Track traffic mediums and traffic sources Monitor pageviews, bounce rate, and online conversions	Free

How to improve digital marketing ROI?

Now that you know your digital marketing ROI, how can you improve it?

These tips can help your business get the most value (and best return) from online marketing:

Let’s go through them!

1. Use data to inform decisions

Today’s companies have access to more data — and more tools for analyzing that data — than ever before. You can use this digital marketing data to calculate your ROI and use your ROI-related data to make more informed decisions.

Get the tools you need to collect marketing data, like Google Analytics 4, and set up processes for collecting and analyzing it. Then, use that data to inform your decisions, produce better results, and improve your Internet marketing ROI.

2. Establish ROI goals

If you want to improve your online marketing ROI, it’s helpful to set well-defined goals. Establishing goals gives you something to aim for, helping to guide your efforts. When setting goals, make them SMART goals to increase your chances of success.

SMART goals are:

Specific: Make your goals as descriptive as possible. For example, instead of setting a goal like “increase ROI,” set a more specific goal to “increase ROI by 50%.”
Measurable: Set up a process for measuring your progress toward your goals.
Achievable: While your goals can be ambitious, make sure you can realistically achieve them.
Relevant: Make sure your ROI goals are relevant to your broader business objectives.
Time-bound: Set a time limit to provide motivation and accountability for achieving your goals.

Also, keep in mind that ROI goals vary from business to business. Goals differ based on your past ROI performance, your costs, and other factors. If you’re partnering with a digital marketing agency, they can help you create realistic goals.

3. Avoid vanity metrics

It’s important to stay away from vanity metrics that don’t correlate to numbers that matter. While vanity metrics make your marketing efforts look good, they don’t contribute to your actual website objectives.

Some common examples of vanity metrics include things like:

Site visitors
Subscribers
Social media followers

Instead, focus your attention on engagement metrics that relate to ROI, tell you what content drives results, and reveal growth opportunities.

Engagement metrics include things like:

Repeat page views
Conversion rate
Comments per post

4. Use marketing automation tools

Marketing automation tools can help you accomplish more with less, reducing your costs and increasing your digital marketing ROI. Consider investing in marketing automation tools and services.

They help with:

Completing repetitive tasks
Organizing your data
Repurposing your data, like using organic user data to power remarketing campaigns
Segmenting your audience
And more

Email automation tools like EmailMarketingFX, for instance, allow you to set up email marketing campaigns that automatically send emails to prospects at certain time intervals or send an email when a user completes a certain action on your site.

These same tools can help you segment your email subscriber list and track the results of your email campaigns.

5. Test and adjust your campaigns

Digital marketing offers many opportunities for testing aspects of your campaigns and then using your findings to improve them. You can test nearly every aspect of a campaign, from your copy to your page design to your targeting to the channels you use.

A/B testing is one of the most useful testing methods available.

This approach involves creating two versions of an ad, landing page, or other campaign element. You then show the different versions to two groups of users and track performance to see which version works best.

You then keep the winning version and test another element of your campaign. With this approach, you can continually improve your campaigns and get better ROI over time.

6. Get professional help

Digital marketing encompasses multiple channels, each with specific tactics. Becoming a master of them all requires a significant amount of time — and even then, most marketers don’t have the time to manage each channel successfully.

So, if you’re not seeing the ROI expected from digital marketing, consider getting professional help.

Seasoned agencies (like WebFX) can provide the resources needed to turn a campaign around, like:

Strategy- and industry-specific experts
Software for tracking offline and online marketing performance
Support from representatives at Google Ads, Meta Advertising, and other companies

While outsourcing digital marketing pricing may cost several thousand dollars per month, it’s often more cost-effective than establishing and maintaining an internal team. Not to mention, experienced agencies can frequently deliver a higher ROI due to their experience, talent, and technology.

FAQs

Now that we’ve covered how to measure and grow your ROI, you may have some follow-up questions. Let’s answer them below!

Why should I measure ROI in digital marketing?

Measuring your digital marketing’s ROI is critical to the success of your efforts. That’s because measuring your ROI can help you:

Make strategic marketing decisions: ROI tells you what’s working and what’s not. With accurate data on your online marketing’s effectiveness and strategies, you can make strategic decisions about where to invest.
Aligning marketing with business strategy: Companies measure success via growth, and that growth comes from revenue. Measuring digital marketing’s returns helps align marketing efforts with the organization’s primary objective — growing.
Growing digital marketing funding: Proof of online marketing’s effectiveness can also back proposals for additional funding. ROI is a powerful metric for demonstrating digital’s bottom-line impact and can persuade leadership to expand your marketing budget.

Not to mention, tech for tracking and measuring ROI is widely available — including free solutions.

Which digital marketing channels have the highest ROI?

The digital marketing channels with the highest ROI are:

Email marketing
SEO
PPC

ROI of email, SEO, and PPC

From our decades of experience, we can confirm that most businesses see the best returns from these channels.

How do I measure the ROI of my brand awareness efforts?

Many marketing teams need to justify their brand awareness investments. That’s because these initiatives typically don’t get any credit for sparking interest in your business and driving conversions.

So how can you estimate the ROI of your brand awareness efforts? You can measure brand awareness ROI through various approaches, depending on your efforts:

Brand lift studies: They measure how a control group’s awareness and perception your brand after running a campaign. These studies tell you if your campaign effectively improved the group’s perception of your business.
Website traffic analysis: Monitor organic site traffic to see if interest in your brand has been increasing.
Brand search volume: Use Google Analytics 4 to monitor organic searches of your brand, products, and related keywords to see if more people are searching for you.
Marketing attribution: This approach determines the contribution of each marketing initiative and channel to your desired outcome, such as a conversion or sale. Our proprietary platform, RevenueCloudFX, can track and attribute leads to marketing efforts, informing you of which brand awareness campaigns effectively drove results.

What can affect online marketing’s ROI accuracy?

Based on their estimated ROI, businesses will make strategic decisions about their marketing efforts — from how much they spend to where they spend it. Measuring online marketing’s ROI, however, is not always accurate.

A few factors that can cause inaccuracies include:

Tracking errors
Attribution methods
Spending gaps

While some of these factors are unavoidable (businesses have their preferred attribution model), others are essential to resolve. Tracking issues, for example, can severely underreport digital marketing’s impact, leading to marketing decisions that tank business growth.

What are the biggest challenges in measuring marketing's ROI?

When you measure your marketing ROI, you’ll find that you’re going to face some difficulties with measuring it accurately. Let’s look at the top three challenges you’ll have when measuring ROI in marketing.

1. Multiple touchpoints

The biggest challenge you’ll meet with measuring your ROI in marketing is touchpoints.

The customer’s journey isn’t linear — every customer journey is different. People can interact with your business in multiple ways, which can sometimes make it difficult to know what piece of marketing caused a conversion.

Users can have multiple touchpoints — just look at this example of a customer’s potential journey:

Discovers your brand through search
Reads a blog post from your site
Subscribes to your email list
Watches a video about your product
Sees a targeted ad on social media
Buys your product

In this journey, it’s hard to know precisely what led the user to convert. While the targeted ad was the last step, it could have been the video that made them ready. There isn’t a clear-cut way to know which strategy made your audience convert.

Solution: Focus on the first and last touchpoints

A potential solution to this challenge is focusing on the first and last touchpoints for attribution. This model focuses on giving the ROI “credit” to the first and last touchpoints before the sale. While it’s not the only solution, it’s an option to help you measure your ROI accurately.

Additionally, investing in a CRM software, like Nutshell, can help you easily track these touchpoints to understand what makes users convert. The best part is you don’t have to spend hours investigating. Nutshell does all the hard work for you!

2. Measuring at the right time

Another challenge with how to measure marketing ROI is measuring at the right time.

Not every customer purchases in the same amount of time. While you probably have an average duration for your sales cycle, not everyone converts in the same amount of time. You may have people that make impulse purchases and convert fast, while others take longer.

Some customers may not be ready to buy or don’t need the product right away. They may purchase eventually, but your campaign may be over by the time they purchase.

Additionally, some strategies take longer than others to get conversions. For example, email marketing may take sending a couple of emails to get a conversion, while a PPC ad may generate a conversion with a single click.

It can make it challenging to attribute conversions to the right campaign.

As a result, you need to identify the right time to measure ROI.

Solution: Make revenue cycle projections

With this solution, you calculate the long-term effects of marketing strategies. You’ll use your history of metrics to make projections. Primarily, you’ll use past performance to predict which approach was most likely to generate the sale.

A CRM software can help you manage this data to help you make projections.

The downfall with this strategy is that it doesn’t factor in market changes or outside variables, so you’ll need to take these changes into account when trying to determine which strategies led to that conversion.

3. Influence level

Another factor you must consider is the variations of influence.

Not every campaign will resonate with your audience the same. Many people will see your ad and not feel compelled, while others will feel compelled to act.

When these people take action, it can skew your data and make it more challenging to measure your ROI accurately.

Solution: Analyze the impact of each touchpoint

A solution to this challenge is to work backward and look at each touchpoint to see how it impacted the customer. This strategy is most beneficial to companies with longer sales cycles because it helps them have a clearer picture of what steps influence customers the most.

If you use CRM software like Nutshell, you can track each touchpoint to give credit to strategies that have the most significant impact.

The downside with this tactic is that you may give more credit to a strategy than is due. It also doesn’t account for outside variables that might impact how people engage with specific tactics or channels, like email and social media.

Improve your Internet marketing ROI with WebFX

With more than $10 billion generated in revenue for clients, WebFX is a trusted partner for brands looking to improve their digital marketing ROI. From our award-winning team to industry-leading technology, we provide everything organizations need to grow their revenue from the web.

Let’s work together to improve your ROI. Call us at 888-601-5359 or contact us online to speak with a strategist about our custom digital marketing services!