Marketing involves everything that a business does in order to attract customers and create a loyal relationship with them. The science is not precise – but with each day and each technological development, it is getting better.
Many of the questions brought by marketing experts will revolve around the return on investment (ROI). They want to know how much money they will receive for the money that they have used in a marketing campaign.
Defining Return on Marketing Investment
The Return on Marketing Invested (ROI or ROMI) will tell you precisely how much profit a marketing campaign is making in comparison to the costs of running said campaign.
The marketers will use that data to ascertain whether the money was put to good use or not. If the revenue is low, then it means certain changes have to be done to the marketing strategy.
Here are some key terms concerning return on marketing investment:
- Leads: The new prospects which have been brought about by a marketing campaign.
- Wins: New customers that were the result of a marketing campaign.
- Incremental Sales: The new revenue that has resulted from a marketing campaign.
Challenges of Return on Marketing Investment
Despite the efficiency and importance brought by the return on marketing investment, it may be fairly difficult to monitor and measure it. Measuring its investment part is fairly easy; all you have to do is track the hours that you spent in creating the campaign and every dollar used to sponsor a certain movement is easy. The difficult part, however, is to measure the returns – for reasons that are more obvious than others.
- Many Campaigns
Nowadays, marketers don’t run just one campaign; they run a few of them at the same time. So, standing on top of your spending can be rather difficult – since you will have to be attentive to each individual campaign.
- Less Control
We lived in a very fast-paced digital world, where a marketing campaign can take a life of its own. Sometimes, you may have no idea where a campaign will lead. Because of this, it may be rather difficult for you to monitor the effects of your campaign – no matter how much you may be trying to keep an eye on it.
- Difficulty in Seeing the Big Picture
With so many dots to be connected, it can be sometimes difficult to see the big picture. You can never know which message resonated the most, which call to action was the most successful – and where does it all lead to. You can have a fairly good idea – but you can never be certain. You can, however, make things easier by using Google Analytics, CRM, Marketing Automation Platform, and Google Adwords.
Return of marketing investment is something every marketing agency or business owner needs to become familiar with. This will tell you exactly how much profit your company is bringing through advertising. Also, if there isn’t much profit, it will let you know that something has to be changed.