Is My Marketing Effective? How to Measure Campaign Success?

When it comes to measuring the effectiveness of your marketing, most marketers will say that the ultimate metric is the return on investment (ROI). However, there are extreme challenges inherent in trying to calculate ROI. In addition, ROI itself is not an indicator of effectiveness. The change in ROI, otherwise known as the Return on Marginal Investment (ROMI), measures effectiveness and whether you should invest more in a campaign.  

That said, ROI is needed to figure out ROMI. Here’s what you need to know about the two metrics to measure your campaigns’ success better and determine your marketing effectiveness.  

The Problem with Measuring ROI 

There are at least five problems to consider when measuring ROI: 

1. Attribution Models Require Subjectivity  

Attribution models are a collective set of rules marketers follow to identify and ‘attribute’ the credit of a sale or conversion to a given touchpoint in a prospect’s conversion path. How much credit is attributed and, therefore, which model you choose to follow requires some subjectivity. 

Take, for instance—linear attribution vs. Time decay attribution. Linear attribution assigns equal credit to all touchpoints in a conversion path. On the other hand, Time decay attribution gives some credit to each but far less to the touchpoints that were interacted with further back in time.  

Neither is the “correct” attribution model. However, you need to choose one or the other. 

Another issue is it can be especially tough to attribute social media and blog content. In fact, one study reported that social media (47%) and content marketing (40%) are the top two most difficult channels for revenue attribution.  

2. Attributing Leads to Revenue  

The issues with attributing leads to revenue are that: 

• Not all leads convert into revenue-generating clients  
• Leads may convert months or years down the line  
• Attribution requires special marketing tools to track an individual’s buyer journey from lead to revenue-generating client.  

3. Attribution in a Cookie-Less World  

Google’s upcoming deprecation of third-party cookies (now set for 2024) makes it harder to measure ROI from various marketing channels. This is because data collection has been restricted to allow web users to control their personal data. As a result, a cookie-less world will require different approaches to tracking and measuring the ROI of some initiatives.  

4. Customer Lifetime Value Isn’t Constant  

If you don’t know how long it takes your customers to accumulate value, you won’t know what timespan to measure. If the sales cycle is three months, you don’t want to take ROI estimates from a single month. Otherwise, your calculation won’t always give you an accurate or holistic view of what you’re getting back from your investment in each customer.  

5. Incorporating Brand Building  

While brand awareness impacts your sales success, it can be tough to attribute brand awareness campaigns to actual sales results. The usual metrics used to measure brand awareness increases are sometimes called “vanity metrics” since their impact on ROI isn’t immediately visible (e.g., impressions, search volume for branded terms, etc.). However, if the goal of a campaign is to increase brand awareness, then these numbers are no longer “vanity metrics.”  

Marketing Metrics are Goal-Dependent 

As shown, the definition of “vanity metrics” depends on the goal of a marketing campaign. The marketing metrics used to calculate ROMI depend on the marketing channels and campaign goals.  

Some metrics are always important:  

• Customer lifetime value  
• Customer acquisition cost  

A customer acquisition campaign through e-mail marketing would additionally measure:  

• E-mail open rate  
• Click-through rate (CTR)  
• Conversion rate  

Lead generation through content marketing campaigns might also measure:  

• Organic traffic  
• Engagement rates/bounce rates  
• Form fills  
• Gated content downloads 
• Marketing Qualified leads 
• Sales Qualified leads 
• Cost per lead  

Should your campaign measure ROI or ROMI?  

When it is all said and done, ROMI is better than ROI for measuring campaign effectiveness by revealing whether you should increase your marketing spend on a given initiative. ROI can often be a bit broad and vague, while ROMI better shows how much profit your next marketing dollar actually earns.  

Choose the Right Marketing Metrics to Measure Your Campaign 

The metric you choose to measure your campaign can be the make it or break it in your success. Not only should it be aligned with your broader goals — 95% of the top marketers report that in order for your metric to matter, it must also be aligned with your business goals — but it should also give you the most holistic view of your overall marketing effectiveness. In this case, ROMI is often the optimal choice because it measures with more accuracy (using ROI!). 

Want a marketing plan with measurable results and a local focus? It all starts with a free marketing strategy consultation with Midwest Family La Crosse.