Marketing ROI
The return on investment from marketing activities, measuring revenue generated relative to marketing spend.
Definition
Marketing ROI measures the return generated by marketing investments. Basic ROI calculations compare revenue attributed to marketing against costs. More sophisticated approaches account for profit margins, customer lifetime value, and attribution complexity.
Calculating true marketing ROI is challenging due to multi-touch journeys, lag between investment and return, and brand effects that resist direct attribution.
Why It Matters
Marketing must justify its budget with business results. ROI provides the language to communicate marketing value to finance and leadership in terms they understand.
Even imperfect ROI calculations are valuable. Directional understanding of which investments return more than others enables better resource allocation.
Examples in Practice
ROI analysis reveals that events cost 3x more per customer acquired than digital marketing—prompting either event strategy changes or acknowledgment of non-acquisition value.
A company implements lifetime value-based ROI and discovers that a "poor performing" channel actually produces their most valuable customers.
Regular ROI reporting builds finance trust, leading to increased marketing budget when results are demonstrated.