Calculate ROIWhy you should calculate ROI for Marketing!
What does it take to Calculate ROI?
Calculating ROI for Marketing can deliver great results for marketers both at the strategic and tactical levels. But there is a difference between the necessity of calculating ROI to improve marketing strategy and tactics versus using ROI to drive the creative process. There is no question that great creative can deliver very strong ROI, but ROI deals with the execution of great marketing. It isn’t the element that should drive the creative process between the development of great, new exciting ideas and their execution.
How to Calculate ROI?
Marketers very clearly need to calculate ROI to manage the execution of marketing. This is sometimes referred to the business of marketing. ROI needs to be calculated across a number of different dimensions:
Calculate ROI at the media channel level
It is very critical for the manager of a particular media channel to deliver the best results possible for the level of investment made in the media channel. This can often lead to great improvements at the tactical level in how well that media channel is performing across different options available to the media channel. For example, a digital marketer may want to optimize a banner ad versus a sidebar ad or he/she may want to optimize the response received between one network and another.
Calculate ROI across the Media Mix / Cross-platform
Most if not all media works better when it is delivered concurrently with other media. In most cases, any media delivered in any channel concurrently and in a coordinated fashion with Television advertising will deliver great results. Many times this can improve the ROI for the combined investment by over 50%.
Calculate ROI across the 4Ps
Media doesn’t work in a vacuum. With the 4Ps in mind, prices change, new products are available, distribution changes. Understanding the impact of these changes on media effectiveness will help to control for them and allow the marketer to calculate ROI for marketing more accurately. In this way, the true incremental value of an investment in media can be determined.
Calculate ROI when competition or other external factors change
Marketers must control for competitive activities and external factors. For example, the weather and seasonality are big influencers on purchases of non-alcoholic beverages. In order to calculate ROI for marketing properly, these external influences must be controlled for. With this information in mind, marketing planning can be done in a more valuable way. It can lead to significantly better results for the same level of investment. This, in turn, can lead to faster growth in sales, in budgets and in careers.
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