Marketing ROI: learn how to calculate it correctly

young woman doing marketing roi survey

Marketing ROI: learn how to calculate it correctly

Marketing ROI is a powerful indicator that helps you understand whether your marketing campaigns are bringing the expected profit or whether you need to rethink your strategy.

By deeply understanding ROI, you will be able to direct your marketing efforts towards the most profitable activities, optimizing your resources and achieving more impressive results.

Get ready to learn how to calculate this metric and turn it into a valuable ally for the success of your business.

What is ROI in digital marketing?

ROI, acronym for “Return on Investment” is a fundamental metric for evaluating the performance of your marketing actions. 

It allows you to measure the effectiveness of your campaigns, identifying which ones generate positive results and which ones need adjustments.

When we talk about positive return, we are talking about real revenue: earnings vs. expenses. 

In short, ROI shows you how much money you earn for every dollar invested in marketing.

This information is essential to optimize your resources and ensure that you are investing in the channels and strategies that really bring returns.

How to Calculate Marketing ROI: 4 Steps

Uncovering the ROI of digital marketing is simpler than you think. Follow these steps and get a clear view of your return on investment:

1. Define your goals

Before you begin, it’s a good idea to have in mind what your marketing goals are.

Are you looking to increase sales, generate leads, improve brand awareness or something else?

Knowing what you want to achieve will help you define the metrics that will be used to calculate ROI.

2. Identify your costs

List all costs related to your marketing campaign, including staff salaries, tools, paid ads, content production, and any other investments made.

All the money spent to get this campaign aired, from the development of a piece to after-sales expenses, must be included in the Marketing ROI calculation. 

3. Calculate the revenue generated

Determine how much money you made from the campaign, whether through direct sales, qualified leads, or other indicators of success.

Take into account the people who came to your brand or made a new purchase through the campaign. 

4. Apply the formula 

The ROI formula is very simple:

ROI formula
  • Revenue is the total earnings generated by the marketing action
  • The cost/investment covers all expenses associated with executing the strategy.

You can also use the marketing ROI calculator to facilitate your process in search of a result, however, the surveys need to be accurate to guarantee a faithful result. 

Practical example

Suppose your brand carried out a campaign, in which the investment was R$50 thousand and this campaign generated R$250 thousand in sales, then we have: 

ROI= (250.000-50.000 / 50.000)×100

ROI= (200.000/50.000)x100

ROI= 4×100= 400%

Applying the formula we can see that we have 400% ROI for the campaign in question. Which is a positive result!  

What to take into account in the cost/investment?

When calculating ROI, it’s important to consider all costs involved in the campaign, including:

  • Direct costs: staff salaries, tools, paid ads, content production, etc.;
  • Indirect costs: costs for infrastructure, energy, well-being, costs for maintaining the workplace, etc.

Positive points of knowing the Marketing ROI

  • Strategic decision making: Marketing ROI provides you with valuable information to make smarter decisions about your marketing investments;
  • Resource Optimization: By identifying which channels and strategies generate the greatest return, you can optimize your resources and direct them to where they bring the most results;
  • Demonstration of value: ROI is an essential indicator to demonstrate the value of marketing to the company, especially to stakeholders and investors;
  • Continuous improvement: ROI tracking allows you to identify areas for improvement and continually refine your marketing campaigns.

ROI Marketing Attention Points 

  • Clear definition of objectives: ROI is only significant if you have clear and well-defined objectives for your marketing campaign;
  • Consideration of all costs: It is essential to consider all costs involved in the campaign, including direct and indirect costs;
  • Contextualized analysis: ROI should be analyzed in conjunction with other performance indicators, such as reach, engagement and conversion;
  • Evolution over time: ROI can vary over time, so it's important to monitor its evolution and make adjustments to campaigns when necessary.

ROI is a powerful tool for digital marketing success! 

By calculating and analyzing the ROI of your campaigns, you will have a clear view of the return on your investment, allowing you to make more strategic decisions, optimize your resources and achieve increasingly expressive results.

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Meet the GS2 Marketing agency

We are attentive to all the markers of success and how they work in harmony with our strategies.

With this in mind, we use the best digital marketing tools to produce assertive content for our clients, with creative and remarkable actions. 

This seriousness and intelligence in digital marketing provides recognition from many of our clients, for whom we have become a lead generation and conversion machine. 

Don't waste time! Increase your ROI with the best digital marketing practices.

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