Marketing ROI: How to Measure It & Tips to Improve ROI

Whether you're running a standard playbook or you're experimenting with new tactics, you have to justify your marketing budget. Tracking return on investment (ROI) is the key to making smarter decisions about budget allocation and campaign optimization.

Yet attributing results and demonstrating ROI is a constant challenge, even for experienced B2B marketers. In this article, we'll explore how to calculate ROI, discuss benchmarks for key channels, and share tips to optimize your marketing ROI — including insights from Pauline Mura, Livestorm Senior Marketing Partnerships Manager.

Key takeaways:

• Calculate the ROI of your marketing campaigns and benchmark performance against your previous efforts and standard results for your industry and channels.
• Improve marketing ROI by monitoring leading indicators, experimenting with new channels and formats, and retargeting engaged prospects and audience segments.
• Use analytics platforms to track ROI data and attribute results across channels — so you can make data-driven decisions about how to allocate your marketing budget.

What is marketing ROI?

Marketing ROI is a metric that shows how your revenue compares to the cost of your promotional efforts. It reflects how profitable and effective your marketing strategy is.

You can use this metric to measure specific campaigns or all actions during a specific time period. Either way, this metric factors in marketing expenses ranging from ad spend and creative production to employee time and contractor payments.

How to calculate marketing ROI

Use this marketing ROI formula to measure profitability:

Marketing ROI = ((Revenue from Marketing - Marketing Costs) / Marketing Costs) x 100%

Say you want to evaluate a marketing campaign promoting a new product launch. It generated €90,000 in revenue. And the costs totaled €15,000, including:

• Video production: €2,500
• Graphic production: €1,000
• Ad spend: €10,000
• Employee time: €1,500

Your marketing ROI calculation would be ((€90,000 - €15,000) / €15,000) x 100% = 500%.

What is a good ROI in marketing?

Average marketing ROI tends to vary by channel and industry. Here are some channel-based ROI benchmarks to compare against your own results.

Email has an average ROI of 3600%, making it one of the highest performing marketing channels. The average ROI for media companies is lower (3200%), while the average ROI for ecommerce businesses is higher (4500%).

Webinars have an average ROI of 430%, making these online events one of the most profitable ways to connect with your audience. Industry, offer, and funnel stage all affect actual webinar ROI.

For B2B companies, SEO has an average ROI of 748%, according to First Page Sage. The average ROI for B2C SEO is 721%, making this a powerful channel for long-term marketing investment.

Social media ROI varies substantially between networks. Marketers report that YouTube generates the highest ROI, followed by Facebook, Instagram, TikTok, and LinkedIn.

Why is ROI important?

ROI is essential for marketing teams to measure. It's important for:

• Evaluating campaign success: How did your campaign perform? Were your marketing tactics successful? Marketing ROI answers these questions with one straightforward metric.
• Setting benchmarks: What can you expect the next time you run a similar campaign? Measuring ROI helps me establish benchmarks and predict outcomes from future marketing activities.
• Justifying marketing spend: Was it worth running that campaign after all? With ROI metrics, you can demonstrate the value of your marketing efforts and justify the spend.
• Distributing budget: Should your marketing team spend more on this campaign or that one? I use ROI metrics to make data-driven decisions about how to allocate our growth marketing budget.

5 Ways to optimize your marketing ROI

Once you know how to measure marketing ROI and compare it against benchmarks for your channels and industry, take steps to improve this metric for your business. Here are my tried and true suggestions to improve ROI.

1. Monitor key metrics closely

When your ROI isn't as high as you'd like, you can often understand why by checking other marketing metrics — the leading indicators that anticipate revenue.

Say the ROI for a recent webinar wasn't as high as your team expected. When you review the event analytics, you might see that registrations were much lower than anticipated.

Or you might notice that engagement levels were a fraction of your typical range. (Livestorm's Video Engagement Score makes this metric easy to calculate and benchmark.)

Now you know which factors affected performance so you can make strategic improvements next time.

Not sure which metrics to analyze? I recommend checking the list in Livestorm's Guide to Webinars. We broke down the top awareness, engagement, and revenue metrics to monitor.

2. Experiment with new channels and formats

When your ROI starts to decline, consider this a sign that your old approach to digital marketing needs a refresh. Instead of repeating the same old tactics and getting the same lackluster results, try something new.

Start by experimenting with formats. Say you've been hosting a monthly state of the industry webinar. But attendance is starting to decline. Instead, try a panel discussion that features perspectives from guest speakers.

Revisit your timing. Check your analytics to see when your audience is most likely to engage. Or review industry benchmarks to get more data points. For example, the Livestorm 2024 Webinar Marketing Report reveals that Tuesdays and Thursdays are the most popular days for webinars.

Test out new marketing channels. For example, if your social media reach isn't what it used to be, consider building a subscriber list and investing in email marketing. Commit to an amount of time (e.g., three months) for the experiment, and then make a decision about future investments after reviewing the results.

3. A/B test messaging and creatives

Using consistent messaging and creative styles is a great way to make your brand more memorable and easy to identify. At least, it's a smart idea until your marketing content stops resonating with your target audience.

If your marketing content no longer drives the results it used to generate, test new messaging and creatives.

Use a split-test approach by dividing your audience into two groups. Send the new version of your messaging or creative to one group and the tried-and-true version to the other group.

This method works best on email marketing platforms, short-form video platforms like Instagram, and advertising platforms like Google Ads, which all have built-in A/B testing and distribution.

Make sure you change one element only (e.g., the messaging or the creative). This way, you'll know what caused the difference in results — and you won't have to guess.

Then, use the results to guide your strategy. Check metrics like engagement rate, click-through rate (CTR), conversion rate, and revenue to make data-driven decisions.

4. Segment audiences and run targeted campaigns

Even if everyone in your target audience fits your ideal customer profile (ICP), not everyone will be at the same stage of the buyer's journey.

This means not everyone will respond to the same campaigns. Prospects who are just getting to know your brand and leads who are close to making a purchase decision need completely different marketing content.

Instead of promoting the same content to everyone in your pipeline, segment your audience and focus on more targeted campaigns. For example, run educational brand awareness campaigns for new prospects and product demo campaigns for qualified leads.

When you segment your audience, each campaign will generate fewer impressions. But when you tailor content to each segment, every campaign should generate a better ROI and a bigger marketing impact.

5. Create marketing funnels and retarget engaged prospects

Once you've captured the interest of a potential new customer, keep them engaged. Pauline recommends that you “follow up fast. Keep the momentum going by sending a follow-up email that includes a next step or resources. This will keep your audience engaged.”

For paid campaigns, create remarketing lists that automatically target people who have interacted with your content. When running organic campaigns, create behavior-based segments with engaged prospects.

For example, set up a webinar funnel that guides prospects from awareness to purchase and beyond. Incorporate email marketing and remarketing ads to increase conversions and keep ROI high.

Pauline recommends that you “leverage polls during the webinar in order to identify hot leads to pass on to your sales teams. Be strategic with these poll questions, they could be as simple as ‘Do you want to see a demo?’ or ‘What is your main challenge?’”

Challenges with measuring ROI from marketing

In theory, calculating ROI in marketing is straightforward. But collecting data and evaluating insights aren't always as easy as they seem. Here's how I deal with some common ROI challenges.

• Attributing ROI accurately: When your buyer's journey involves multiple touchpoints, attribution can be difficult. Use a multi-touch attribution model and track the customer journey from engagement to conversion.
• Connecting data across channels: If your campaigns include webinars, email, social media, and other channels, it's tough to align your data. Use a marketing analytics platform with a centralized dashboard that gives you a complete view of how each channel works together to drive results.
• Aligning results with business goals: When your team focuses on vanity metrics like impressions and clicks, your efforts won't drive real results. Focus on key performance indicators (KPIs) that fit your business goals — such as sales growth, revenue, and customer lifetime value.

Livestorm to measure event marketing ROI

The right tools make it easy to understand the ROI from your marketing efforts and how to improve your return.

Livestorm's webinar software shares robust analytics for every online event you host, helping you track everything from registrations to attendance to engagement. And our Video Engagement Score calculator benchmarks your results so you can see how your webinar content is really performing.

Ready to see how Livestorm can transform your webinar ROI? Sign up for Livestorm and set up your first webinar in minutes.