Understanding return on investment to drive impactful marketing initiatives.
Being able to attribute a return on marketing investment (ROMI) lets organisations measure the degree to which marketing efforts, either holistically or on a campaign-basis, contribute to revenue growth.
Identify your ROMI Benchmark
Simply said, ROMI looks at the net profit made against the cost of investment in a project. Determining a single overall benchmark for this can be a challenge as all marketing tactics are different.
Activities, such as digital advertisement, automatically track a number of parameters, so you can quickly see how the return on your ad stands up against others that are similar. Platforms like Google Ads have collected data for years, and this extensive bank of information allows them to confidently report metrics such as 800% uplifts for PPC (Pay per click).
Less quantifiable activities, such as content marketing, can be harder to measure. Sales may not be directly attributable to a podcast, video or blog, but can be extrapolated using the incremental traffic to site and other environmental factors.
Tracking URLs/UTMs, A/B testing, and the use of designated landing pages have been a technological breakthrough for the modern-day marketer. However, the Content Marketing Institute still suggest taking the long-term view and factoring in non-financial gains, including audience growth, when it comes to ROMI.
To understand the value of an incremental piece of marketing, most businesses will start off by comparing performance against a previous, similar campaign. At iCandy Design we understand how to take this a step further, building a credible benchmark by gaining insights from existing activities, the competition and industry standards. By pulling out key digital metrics we can outline a clear set of parameters to reference against for any further activity.
Benefits of Understanding ROMI
Understanding ROMI is of particular interest to marketers, finance directors and business owners. Four key benefits are:
Justification of marketing budgets. Marketing spend is often seen as nice to have, and a significant expense for a company. Leaders want to know that it will prove fruitful and deliver profit for the business. Having data to support carrying out additional marketing activity may be the difference between getting an activity signed off to proceed or not.
Prioritising projects. ROMI is usually measured at campaign level to allow marketers to weigh up which activities to include in their plans going forward. It also informs future spending and allocation of budget across different media, platforms and channels.
Measuring performance. Having a benchmark allows for monitoring on an ongoing basis. Projects can be paused, cancelled or further invested in depending on performance against set data points.
Competitor comparison. This allows for a better understanding of how your business is doing compared to industry standards and your key competition.
Accountability. As much as marketing is about ‘the fun stuff’, at the core of what all businesses want is sales. ROMI prompts individuals to account for every penny spent and gives others a measuring stick against which to gauge performance.
Overcoming the Challenges around Calculating ROMI
Measuring incremental financial value is difficult in a dynamic environment; it is rarely possible to compare apples with apples. There are so many variables to account for, many outside the control of the marketer or brand (such as seasonality, economic changes, improved awareness of the brand, etc). Most marketing activities also have a time lag and customer loyalty and churn need to be understood and factored in to get a true answer.
As partners to your business, iCandy Design can collate and analyse these metrics for you.
Impactful Marketing with iCandy Design
Let iCandy Design be your source of marketing advice. With years of digital and marketing experience, we have the knowledge and access to the right tools to identify a robust benchmark. We design and execute punchy marketing campaigns and will accurately measure the return on your marketing investment, giving you the confidence to let your business grow.