MARKETING
How to Calculate Marketing ROI [+Free Excel Templates]
If you can prove that your marketing activities actually made an impact on your business, you’ll have many more opportunities (and budget) to grow your marketing efforts. Sounds like a marketer’s dream, right?
But how do you find the right metrics to measure and prove marketing ROI to your boss and stakeholders? With the help of this guide and a free marketing ROI excel template, you’ll learn how to calculate your marketing ROI with Excel to secure more resources for your marketing team.
How to Calculate ROI in Marketing
To calculate marketing ROI, use this formula: (sales revenue – marketing cost) / marketing cost = ROI
For example, if you’ve been running an $800 marketing campaign for three months, and average sales revenue was $2,400 for those three months, your marketing ROI would be:
200% = ($2,400 – $800)/$800
If math isn’t your cup of tea, use a marketing ROI calculator to do the heavy lifting. The free ROI calculator below considers five factors of your marketing campaign to produce an accurate ROI percentage for your marketing efforts.
Marketing ROI Calculator
Calculate Your Marketing ROI Free
Pro Tip: if you’re a HubSpot customer, you can use this ROI calculator programmed with the same formula.
Calculating ROI the old fashioned way in Excel is still the most popular method for good reason. By using Excel, you can keep track of ROI overtime to run comparisons, identify gaps, and optimize your marketing efforts.
Here’s a guide for calculating marketing ROI in excel.
How to Calculate ROI in Excel
Excel is one of the most accessible ways to calculate return on investment in a matter of seconds. You don’t have to make up any fancy formulas or commands — just follow these steps to calculate your marketing ROI.
Step 1: Write down your formula.
You won’t be able to enter this formula as-is into your spreadsheet, but understanding the formula before opening Excel will be helpful. By taking note of the formula below, you’ll know which cells to include in your Excel formula so that you calculate your numbers correctly.
(Sales Revenue – Marketing Cost)/Marketing Cost
Step 2: Add variables.
Open your Excel spreadsheet and add one row for your sales revenue and one row for marketing costs. In the next column over, include how much sales revenue your marketing campaign generated. Then, under that, add how much your marketing team spent on the campaign.
In the example below, our sales revenue was $50,000 and marketing costs were $12,500. Right away, we know that the campaign generated more money than was spent on it, so that’s a great sign of high ROI.
Step 3: Add the formula
Once you’ve added your revenue and cost numbers, select a free cell to type in the formula using your data. In this example, we chose the cell right below the revenue and cost numbers. Here’s how the formula translates into Excel:
- Sales Revenue is in cell B2
- Marketing Cost is in cell B3
(Sales Revenue – Marketing Costs) / Marketing Costs =
(B2 – B3) / B3
Step 4: Calculate marketing ROI.
Tap enter or return on your keyboard to calculate your ROI.
If the formula doesn’t automatically calculate it as a percentage, change the number format by going to the Home Tab > Number > Percentage.
Step 5: Communicate the ROI
Now that you know the ROI on this marketing campaign was 300%, how do you communicate this to your stakeholders so that they know whether or not 300% was successful? With any statistic, it’s important to give context for the data you discover. For ROI, you can communicate it like this:
“Our return on investment for the latest marketing campaign was 300%. That means for every dollar we spent in marketing costs, we made $3 in revenue. Compared to our past marketing campaigns that had an ROI of 200%, this was our most successful one to date.”
Calculating Marketing ROI with Attribution Variables
Figuring out your return on investment when attribution isn’t as black and white requires a slightly different approach.
For example, over a 12-month campaign, the sales team may inform the marketing team that 10% of the sales revenue came from leads that were organically prospected on the sales team and weren’t impacted by marketing’s efforts. This is an example of varying attribution of revenue and is a common problem that marketing and sales teams face. In other words: Who really gets the credit for revenue generated?
Depending on the thresholds set by both teams, you can add attribution as a this variable along with the original factors using this ROI equation:
(Sales Revenue – Organic Sales Revenue – Marketing Cost)/Marketing Cost
To calculate the ROI, tap enter or return on your keyboard and you’ll have a more precise ROI metric that attributes credit to the sales team for revenue they generated without the help of marketing.
After accounting for organic sales revenue, the marketing team’s ROI was a bit lower at 220%. To communicate this to stakeholders, you might say:
“Sales revenue for the past 12 months was $50,000. The sales team generated $10,000 of that revenue through organic efforts like prospecting. The marketing team’s campaign contributed to the other $40,000 in revenue resulting in a 220% ROI. That means for every dollar we spent in marketing costs, we made $2.20 in revenue. Compared to our past marketing campaigns that had an ROI of less than 200%, this was very successful.”
Now that we’ve reviewed a couple of examples, let’s walk through which metrics you should track to measure ROI for your marketing campaigns.
Metrics to Track for Marketing ROI
- Reach
- Impressions
- Visits
- Leads
- Conversion Rates
- Customer Lifetime Value (CLV)
- Return on Ad Spend (ROAS)
- Cost Per Lead (CPL)
- Cost Per Acquisition (CPA)
- Lead Close Rate
Not all metrics are equal when it comes to ROI, so you’re going to need to tell a story with the right data. Here are the top metrics to tack when measuring marketing ROI.
1. Reach
Reach is an important metric to track for advertising spend, especially for digital ads. This metric determines how many individual people saw your marketing campaign content.
If your campaign has a goal of increasing brand awareness within a large target audience, you’ll want to look at reach to make sure you’re reaching many different people rather than the same person a few thousand times.
2. Impressions
Impressions tell you how many times your marketing content was viewed. They don’t, however, don’t take into account whether the users were unique or not. Depending on your campaign goals, this metric can indicate how efficient your campaign was at spending money compared to how many times campaign assets were seen.
If your campaign goal is to guide customers through a traditional marketing funnel, repeat exposure to an ad is a key part of doing this successfully and impressions is one metric you can use to track this.
3. Visits
Your website is one of the most important marketing assets your team manages. Every time a person visits your site, they have an opportunity to become a customer and spend money with your business.
Measuring the ROI of a new website redesign using visits as a metric can give your team insight into whether the new design is working, whether SEO has improved and brought in more traffic, and more.
4. Leads
Acquiring leads can get expensive if your marketing strategy isn’t up to par. Determining ROI on lead acquisition is critical as the goal is to keep Cost Per Lead (CPL) in line with your company’s revenue goals.
It’s a good idea to develop a service level agreement (SLA) with the sales team to determine how much marketing is willing to spend on leads vs. the customer lifetime value (CLV).
5. Conversion Rates
A conversion rate details the percentage of people who take a specific action on one of your marketing assets. This could be clicking a CTA on your website, making a purchase, or signing up for a newsletter.
It’s common for a marketing team to manage several conversion paths, thus having several conversion rates to keep track of. As a result, you’ll have a different ROI for each conversion.
To measure which conversions have the best ROI, you’ll need to determine how much it costs to get a customer to the point of conversion (i.e. Did you use paid ads or organic traffic to get visitors to convert?) and how much that conversion is worth (if the conversion is a purchase, then you’d use the purchase price).
6. Customer Lifetime Value (CLV)
Believe it or not, customers are valued based on how much they spend, how many purchases they make, how often they engage with CTAs, content, and more. Your company can set the criteria for a customer’s value. Once you’ve determined this, CLV can be calculated using this formula.
CLV is a useful variable to include when calculating your marketing ROI because it compares how much you spend on marketing campaigns compared to how much money a customer is worth to the business throughout the customer life cycle.
7. Return on Ad Spend (ROAS)
Sometimes marketing campaigns rely heavily if not solely on paid digital advertisements. These ads can take many forms including search ads, display ads, social media ads, and more.
Return on Ad Spend (ROAS) is a type of ROI metric that lets you know how efficiently you’re spending your advertising dollars. The formula is the exact same as the ROI formula we shared earlier, except it only measures paid advertising dollars rather than all marketing spend which could include costs for contractors, agencies, and other functions that help launch your campaign.
If you’re curious about where your ROAS stands right now, use this free ROAS calculator to get an idea.
8. Cost Per Lead (CPL)
Cost Per Lead is a metric that marketers use to measure how many interested prospects their campaign is gaining. A lead doesn’t make a purchase. Instead, they exchange information for access to a business’s content or offers. This information can be an email address, phone number, survey, or something else that is not monetary.
What’s considered a high or low CPL varies widely by industry, company, and even campaign to campaign. Factors like copy, design, site speed, landing page content, and more can affect your CPL numbers.
9. Cost Per Acquisition (CPA)
Similar to Cost Per Lead, Cost Per Acquisition measures how many people take an action to purchase your product. An acquisition is usually identified by a visitor entering their card information to sign up for a free or discounted trial. They may also make a purchase outright.
10. Lead Close Rate
Your lead close rate is best described as the number of leads who turn into customers. Ideally, every marketer wants every lead to become a customer, resulting in a 100% lead close rate, but that’s unrealistic. Just like CPL and CPA, the lead close rate can vary widely among industries, companies, and campaigns.
Tracking this metric can identify gaps in your marketing campaign. If you notice many of your leads are not returning to make a purchase, you can identify another touch point to reach them or try retargeting them with a different ad that leads them to make a purchase.
For more marketing metrics to measure for ROI, take a look at our marketing metrics template.
How to Create Your Own Marketing Metrics Report
So now you know what metrics you need, but what about generating a report to share these metrics? Trust me, nobody wants to receive a spreadsheet and be expected to read it front and back. Even if your marketing ROI is 1000%+ day over day, you’ll probably receive a lackluster response from your stakeholders if you don’t tell a story with the data.
Follow these steps to create an engaging marketing metrics report.
Step 1: Follow along by downloading a free monthly marketing reporting template for Excel and PowerPoint.
Step 2: Open Excel and add your metrics.
The equations and graphs will automatically populate and adjust based on the metrics you add.
Step 3: Copy the graphs and paste them into PowerPoint.
Right click on the graph you want to copy and select Copy.
Then open your PowerPoint slide deck and click Paste where you want the graph to go.
Step 4: Customize your graphs and charts to fit your company’s brand.
Click on individual elements in the graph to customize them.
Step 5: Add context to tell a story with your data.
Add content to each slide that explains your marketing team’s success from the past month. For example, if you have a blog post that drove a lot of leads, you could include a photo of the post along with a few takeaways. These specific examples give context to your presentation and justify why your marketing efforts worked and how you can repeat this success in your next campaign.
ROI Excel Templates
Excel is one of the best tools to use when tracking and calculating ROI regularly. Here’s a collection of marketing ROI excel templates so you can report your metrics like a pro.
1. Reach Marketing ROI Excel Template
Calculate your marketing campaign’s reach with this ROI template. You can measure the reach of your blog, email, and social media content.
2. Website Visits Marketing ROI Excel Template
With this template, you can calculate your website visits via sources and channels including paid traffic, direct traffic, and social media referrals.
3. Leads Marketing ROI Excel Template
See how many leads are generated with your marketing campaigns with this excel ROI template. These results are segmented by source.
4. Acquisition Marketing ROI Excel Template
Use this template to track how many customers your campaign acquired, segmented by traffic source.
5. Conversion Rate Marketing ROI Excel Template
Identify how many leads converted to customers as a result of your marketing campaign with the conversion rate marketing ROI excel template.
Optimize Your Marketing Campaigns for Higher ROI
Businesses can make a lot of assumptions about how well marketing campaigns perform, but without the ROI data to back it up, they’re just that — assumptions. Get your excel sheet or marketing ROI calculator out and follow this guide to really understand how well your campaigns are doing. You may even be able to make a case for a larger budget, additional headcount, or more resources to market your product or service even better.
Editor’s note: This post was originally published in September 2013 and has been updated for comprehensiveness.
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MARKETING
YouTube Ad Specs, Sizes, and Examples [2024 Update]
Introduction
With billions of users each month, YouTube is the world’s second largest search engine and top website for video content. This makes it a great place for advertising. To succeed, advertisers need to follow the correct YouTube ad specifications. These rules help your ad reach more viewers, increasing the chance of gaining new customers and boosting brand awareness.
Types of YouTube Ads
Video Ads
- Description: These play before, during, or after a YouTube video on computers or mobile devices.
- Types:
- In-stream ads: Can be skippable or non-skippable.
- Bumper ads: Non-skippable, short ads that play before, during, or after a video.
Display Ads
- Description: These appear in different spots on YouTube and usually use text or static images.
- Note: YouTube does not support display image ads directly on its app, but these can be targeted to YouTube.com through Google Display Network (GDN).
Companion Banners
- Description: Appears to the right of the YouTube player on desktop.
- Requirement: Must be purchased alongside In-stream ads, Bumper ads, or In-feed ads.
In-feed Ads
- Description: Resemble videos with images, headlines, and text. They link to a public or unlisted YouTube video.
Outstream Ads
- Description: Mobile-only video ads that play outside of YouTube, on websites and apps within the Google video partner network.
Masthead Ads
- Description: Premium, high-visibility banner ads displayed at the top of the YouTube homepage for both desktop and mobile users.
YouTube Ad Specs by Type
Skippable In-stream Video Ads
- Placement: Before, during, or after a YouTube video.
- Resolution:
- Horizontal: 1920 x 1080px
- Vertical: 1080 x 1920px
- Square: 1080 x 1080px
- Aspect Ratio:
- Horizontal: 16:9
- Vertical: 9:16
- Square: 1:1
- Length:
- Awareness: 15-20 seconds
- Consideration: 2-3 minutes
- Action: 15-20 seconds
Non-skippable In-stream Video Ads
- Description: Must be watched completely before the main video.
- Length: 15 seconds (or 20 seconds in certain markets).
- Resolution:
- Horizontal: 1920 x 1080px
- Vertical: 1080 x 1920px
- Square: 1080 x 1080px
- Aspect Ratio:
- Horizontal: 16:9
- Vertical: 9:16
- Square: 1:1
Bumper Ads
- Length: Maximum 6 seconds.
- File Format: MP4, Quicktime, AVI, ASF, Windows Media, or MPEG.
- Resolution:
- Horizontal: 640 x 360px
- Vertical: 480 x 360px
In-feed Ads
- Description: Show alongside YouTube content, like search results or the Home feed.
- Resolution:
- Horizontal: 1920 x 1080px
- Vertical: 1080 x 1920px
- Square: 1080 x 1080px
- Aspect Ratio:
- Horizontal: 16:9
- Square: 1:1
- Length:
- Awareness: 15-20 seconds
- Consideration: 2-3 minutes
- Headline/Description:
- Headline: Up to 2 lines, 40 characters per line
- Description: Up to 2 lines, 35 characters per line
Display Ads
- Description: Static images or animated media that appear on YouTube next to video suggestions, in search results, or on the homepage.
- Image Size: 300×60 pixels.
- File Type: GIF, JPG, PNG.
- File Size: Max 150KB.
- Max Animation Length: 30 seconds.
Outstream Ads
- Description: Mobile-only video ads that appear on websites and apps within the Google video partner network, not on YouTube itself.
- Logo Specs:
- Square: 1:1 (200 x 200px).
- File Type: JPG, GIF, PNG.
- Max Size: 200KB.
Masthead Ads
- Description: High-visibility ads at the top of the YouTube homepage.
- Resolution: 1920 x 1080 or higher.
- File Type: JPG or PNG (without transparency).
Conclusion
YouTube offers a variety of ad formats to reach audiences effectively in 2024. Whether you want to build brand awareness, drive conversions, or target specific demographics, YouTube provides a dynamic platform for your advertising needs. Always follow Google’s advertising policies and the technical ad specs to ensure your ads perform their best. Ready to start using YouTube ads? Contact us today to get started!
MARKETING
Why We Are Always ‘Clicking to Buy’, According to Psychologists
Amazon pillows.
MARKETING
A deeper dive into data, personalization and Copilots
Salesforce launched a collection of new, generative AI-related products at Connections in Chicago this week. They included new Einstein Copilots for marketers and merchants and Einstein Personalization.
To better understand, not only the potential impact of the new products, but the evolving Salesforce architecture, we sat down with Bobby Jania, CMO, Marketing Cloud.
Dig deeper: Salesforce piles on the Einstein Copilots
Salesforce’s evolving architecture
It’s hard to deny that Salesforce likes coming up with new names for platforms and products (what happened to Customer 360?) and this can sometimes make the observer wonder if something is brand new, or old but with a brand new name. In particular, what exactly is Einstein 1 and how is it related to Salesforce Data Cloud?
“Data Cloud is built on the Einstein 1 platform,” Jania explained. “The Einstein 1 platform is our entire Salesforce platform and that includes products like Sales Cloud, Service Cloud — that it includes the original idea of Salesforce not just being in the cloud, but being multi-tenancy.”
Data Cloud — not an acquisition, of course — was built natively on that platform. It was the first product built on Hyperforce, Salesforce’s new cloud infrastructure architecture. “Since Data Cloud was on what we now call the Einstein 1 platform from Day One, it has always natively connected to, and been able to read anything in Sales Cloud, Service Cloud [and so on]. On top of that, we can now bring in, not only structured but unstructured data.”
That’s a significant progression from the position, several years ago, when Salesforce had stitched together a platform around various acquisitions (ExactTarget, for example) that didn’t necessarily talk to each other.
“At times, what we would do is have a kind of behind-the-scenes flow where data from one product could be moved into another product,” said Jania, “but in many of those cases the data would then be in both, whereas now the data is in Data Cloud. Tableau will run natively off Data Cloud; Commerce Cloud, Service Cloud, Marketing Cloud — they’re all going to the same operational customer profile.” They’re not copying the data from Data Cloud, Jania confirmed.
Another thing to know is tit’s possible for Salesforce customers to import their own datasets into Data Cloud. “We wanted to create a federated data model,” said Jania. “If you’re using Snowflake, for example, we more or less virtually sit on your data lake. The value we add is that we will look at all your data and help you form these operational customer profiles.”
Let’s learn more about Einstein Copilot
“Copilot means that I have an assistant with me in the tool where I need to be working that contextually knows what I am trying to do and helps me at every step of the process,” Jania said.
For marketers, this might begin with a campaign brief developed with Copilot’s assistance, the identification of an audience based on the brief, and then the development of email or other content. “What’s really cool is the idea of Einstein Studio where our customers will create actions [for Copilot] that we hadn’t even thought about.”
Here’s a key insight (back to nomenclature). We reported on Copilot for markets, Copilot for merchants, Copilot for shoppers. It turns out, however, that there is just one Copilot, Einstein Copilot, and these are use cases. “There’s just one Copilot, we just add these for a little clarity; we’re going to talk about marketing use cases, about shoppers’ use cases. These are actions for the marketing use cases we built out of the box; you can build your own.”
It’s surely going to take a little time for marketers to learn to work easily with Copilot. “There’s always time for adoption,” Jania agreed. “What is directly connected with this is, this is my ninth Connections and this one has the most hands-on training that I’ve seen since 2014 — and a lot of that is getting people using Data Cloud, using these tools rather than just being given a demo.”
What’s new about Einstein Personalization
Salesforce Einstein has been around since 2016 and many of the use cases seem to have involved personalization in various forms. What’s new?
“Einstein Personalization is a real-time decision engine and it’s going to choose next-best-action, next-best-offer. What is new is that it’s a service now that runs natively on top of Data Cloud.” A lot of real-time decision engines need their own set of data that might actually be a subset of data. “Einstein Personalization is going to look holistically at a customer and recommend a next-best-action that could be natively surfaced in Service Cloud, Sales Cloud or Marketing Cloud.”
Finally, trust
One feature of the presentations at Connections was the reassurance that, although public LLMs like ChatGPT could be selected for application to customer data, none of that data would be retained by the LLMs. Is this just a matter of written agreements? No, not just that, said Jania.
“In the Einstein Trust Layer, all of the data, when it connects to an LLM, runs through our gateway. If there was a prompt that had personally identifiable information — a credit card number, an email address — at a mimum, all that is stripped out. The LLMs do not store the output; we store the output for auditing back in Salesforce. Any output that comes back through our gateway is logged in our system; it runs through a toxicity model; and only at the end do we put PII data back into the answer. There are real pieces beyond a handshake that this data is safe.”
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