Many difficulties in calculating a ROI in real conditions
Posted: Sat Jan 04, 2025 7:16 am
We took the case where your market is growing, but you can just as easily launch a marketing campaign on a product or service, so the turnover is down. Let's imagine that the turnover generated by one of your products drops by €1,000 per month. You still launch your monthly marketing campaign and notice, at the end of the month, a loss of only €200. In this case, you have still lost money, but less than expected. You thought you would lose €1,000, but you only lost €200, which means that you "saved" €800 thanks to your marketing campaign. From then on, we can calculate the ROI of your campaign as follows:
[(Savings made – Marketing cost) / Marketing cost] x 100
In this case, we get a result of [(800 – 500) / 500] x 100 = 60% ROI. Your marketing ROI is positive, so you have managed to minimize the loss of turnover seen in recent months.
Many difficulties in calculating a ROI in real conditions
As we said in the introduction, a marketing campaign is not an exact science. To calculate an ROI, we also rely on predictions and a simplified interpretation of reality. In the same way, a marketing campaign carried panama out over a given period of time can have positive effects on your turnover, well after the end of it. For example, we can quite paraguay whatsapp list easily imagine that a customer adds the product that is the subject of our marketing campaign to their basket, but that they only make the purchase the following month. Or, a customer could be won over by a product thanks to your marketing campaign, tell a friend about it who will then buy the product a month or two later. In both cases, your campaign will have indeed generated conversions, but it will be very difficult to quantify them within the framework of your campaign.
Take into account “brand awareness”
Another challenge when it comes to identifying the ROI of a marketing campaign is inherent in the very goals of the campaign. Making sales is a logical goal, but generating brand awareness is also the major goal of most marketing campaigns. It can be measured by counting the articles written about your product/service, or your company, looking at the number of shares on social networks, assessing people's general enthusiasm for your campaign, etc. It is particularly complicated to translate these "benefits" into financial terms, but they should not be ignored. All these additional elements and their respective KPIs must be taken into account to evaluate the success of your campaign, even if, of course, the main objective of a marketing campaign remains to generate growth in the long term.
[(Savings made – Marketing cost) / Marketing cost] x 100
In this case, we get a result of [(800 – 500) / 500] x 100 = 60% ROI. Your marketing ROI is positive, so you have managed to minimize the loss of turnover seen in recent months.
Many difficulties in calculating a ROI in real conditions
As we said in the introduction, a marketing campaign is not an exact science. To calculate an ROI, we also rely on predictions and a simplified interpretation of reality. In the same way, a marketing campaign carried panama out over a given period of time can have positive effects on your turnover, well after the end of it. For example, we can quite paraguay whatsapp list easily imagine that a customer adds the product that is the subject of our marketing campaign to their basket, but that they only make the purchase the following month. Or, a customer could be won over by a product thanks to your marketing campaign, tell a friend about it who will then buy the product a month or two later. In both cases, your campaign will have indeed generated conversions, but it will be very difficult to quantify them within the framework of your campaign.
Take into account “brand awareness”
Another challenge when it comes to identifying the ROI of a marketing campaign is inherent in the very goals of the campaign. Making sales is a logical goal, but generating brand awareness is also the major goal of most marketing campaigns. It can be measured by counting the articles written about your product/service, or your company, looking at the number of shares on social networks, assessing people's general enthusiasm for your campaign, etc. It is particularly complicated to translate these "benefits" into financial terms, but they should not be ignored. All these additional elements and their respective KPIs must be taken into account to evaluate the success of your campaign, even if, of course, the main objective of a marketing campaign remains to generate growth in the long term.