What is marketing ROI?
Marketing ROI (return on investment) measures the revenue or profit generated by marketing activities relative to their cost. The basic formula is simple: subtract your marketing cost from the revenue it generated, divide by the marketing cost, and multiply by one hundred to get a percentage.
In practice, measuring marketing ROI is far more complex than the formula suggests. Attribution is messy -- a customer might see a social ad, read a blog post, receive an email, and then convert through a Google search. Which channel gets the credit? Multi-touch attribution models attempt to solve this, but none are perfect.
Despite the complexity, marketing ROI remains the most important metric for justifying marketing spend and making allocation decisions. When you can demonstrate that every dollar invested in marketing returns three or five or ten dollars in revenue, securing budget and executive buy-in becomes straightforward.