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.
Pro Tip: if you’re a HubSpot customer, you canuse 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:
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:
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.
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.
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.
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.
The author’s views are entirely his or her own (excluding the unlikely event of hypnosis) and may not always reflect the views of Moz.
We’re back with another SEO recap with Tom Capper! As you’ve probably noticed, ChatGPT has taken the search world by storm. But does GPT-3 mean the end of SEO as we know it, or are there ways to incorporate the AI model into our daily work?
Tom tries to tackle this question by demonstrating how he plans to use ChatGPT, along with other natural language processing systems, in his own work.
Be sure to check out the commentary on ChatGPT from our other Moz subject matter experts, Dr. Pete Meyers and Miriam Ellis:
Video Transcription
Hello, I’m Tom Capper from Moz, and today I want to talk about how I’m going to use ChatGPT and NLP, natural language processing apps in general in my day-to-day SEO tasks. This has been a big topic recently. I’ve seen a lot of people tweeting about this. Some people saying SEO is dead. This is the beginning of the end. As always, I think that’s maybe a bit too dramatic, but there are some big ways that this can be useful and that this will affect SEOs in their industry I think.
The first question I want to ask is, “Can we use this instead of Google? Are people going to start using NLP-powered assistants instead of search engines in a big way?”
So just being meta here, I asked ChatGPT to write a song about Google’s search results being ruined by an influx of AI content. This is obviously something that Google themselves is really concerned about, right? They talked about it with the helpful content update. Now I think the fact that we can be concerned about AI content ruining search results suggests there might be some problem with an AI-powered search engine, right?
No, AI powered is maybe the wrong term because, obviously, Google themselves are at some degree AI powered, but I mean pure, AI-written results. So for example, I stole this from a tweet and I’ve credited the account below, but if you ask it, “What is the fastest marine mammal,” the fastest marine mammal is the peregrine falcon. That is not a mammal.
Then it mentions the sailfish, which is not a mammal, and marlin, which is not a mammal. This is a particularly bad result. Whereas if I google this, great, that is an example of a fast mammal. We’re at least on the right track. Similarly, if I’m looking for a specific article on a specific web page, I’ve searched Atlantic article about the declining quality of search results, and even though clearly, if you look at the other information that it surfaces, clearly this has consumed some kind of selection of web pages, it’s refusing to acknowledge that here.
Whereas obviously, if I google that, very easy. I can find what I’m looking for straightaway. So yeah, maybe I’m not going to just replace Google with ChatGPT just yet. What about writing copy though? What about I’m fed up of having to manually write blog posts about content that I want to rank for or that I think my audience want to hear about?
So I’m just going to outsource it to a robot. Well, here’s an example. “Write a blog post about the future of NLP in SEO.” Now, at first glance, this looks okay. But actually, when you look a little bit closer, it’s a bluff. It’s vapid. It doesn’t really use any concrete examples.
It doesn’t really read the room. It doesn’t talk about sort of how our industry might be affected more broadly. It just uses some quick tactical examples. It’s not the worst article you could find. I’m sure if you pulled a teenager off the street who knew nothing about this and asked them to write about it, they would probably produce something worse than this.
But on the other hand, if you saw an article on the Moz blog or on another industry credible source, you’d expect something better than this. So yeah, I don’t think that we’re going to be using ChatGPT as our copywriter right away, but there may be some nuance, which I’ll get to in just a bit. What about writing descriptions though?
I thought this was pretty good. “Write a meta description for my Moz blog post about SEO predictions in 2023.” Now I could do a lot better with the query here. I could tell it what my post is going to be about for starters so that it could write a more specific description. But this is already quite good. It’s the right length for a meta description. It covers the bases.
It’s inviting people to click. It makes it sound exciting. This is pretty good. Now you’d obviously want a human to review these for the factual issues we talked about before. But I think a human plus the AI is going to be more effective here than just the human or at least more time efficient. So that’s a potential use case.
What about ideating copy? So I said that the pure ChatGPT written blog post wasn’t great. But one thing I could do is get it to give me a list of subtopics or subheadings that I might want to include in my own post. So here, although it is not the best blog post in the world, it has covered some topics that I might not have thought about.
So I might want to include those in my own post. So instead of asking it “write a blog post about the future of NLP in SEO,” I could say, “Write a bullet point list of ways NLP might affect SEO.” Then I could steal some of those, if I hadn’t thought of them myself, as potential topics that my own ideation had missed. Similarly you could use that as a copywriter’s brief or something like that, again in addition to human participation.
My favorite use case so far though is coding. So personally, I’m not a developer by trade, but often, like many SEOs, I have to interact with SQL, with JavaScript, with Excel, and these kinds of things. That often results in a lot of googling from first principles for someone less experienced in those areas.
Even experienced coders often find themselves falling back to Stack Overflow and this kind of thing. So here’s an example. “Write an SQL query that extracts all the rows from table2 where column A also exists as a row in table1.” So that’s quite complex. I’ve not really made an effort to make that query very easy to understand, but the result is actually pretty good.
It’s a working piece of SQL with an explanation below. This is much quicker than me figuring this out from first principles, and I can take that myself and work it into something good. So again, this is AI plus human rather than just AI or just human being the most effective. I could get a lot of value out of this, and I definitely will. I think in the future, rather than starting by going to Stack Overflow or googling something where I hope to see a Stack Overflow result, I think I would start just by asking here and then work from there.
That’s all. So that’s how I think I’m going to be using ChatGPT in my day-to-day SEO tasks. I’d love to hear what you’ve got planned. Let me know. Thanks.
The definition of a whitepaper varies heavily from industry to industry, which can be a little confusing for marketers looking to create one for their business.
The old-school definition comes from politics, where it means a legislative document explaining and supporting a particular political solution.
This afternoon, HubSpot announced it would be making cuts in its workforce during Q1 2023. In a Securities and Exchange Commission filing it put the scale of the cuts at 7%. This would mean losing around 500 employees from its workforce of over 7,000.
The reasons cited were a downward trend in business and a “faster deceleration” than expected following positive growth during the pandemic.
Layoffs follow swift growth. Indeed, the layoffs need to be seen against the background of very rapid growth at the company. The size of the workforce at HubSpot grew over 40% between the end of 2020 and today.
In 2022 it announced a major expansion of its international presence with new operations in Spain and the Netherlands and a plan to expand its Canadian presence in 2023.
Why we care. The current cool down in the martech space, and in tech generally, does need to be seen in the context of startling leaps forward made under pandemic conditions. As the importance of digital marketing and the digital environment in general grew at an unprecedented rate, vendors saw opportunities for growth.
The world is re-adjusting. We may not be seeing a bubble burst, but we are seeing a bubble undergoing some slight but predictable deflation.
Kim Davis is the Editorial Director of MarTech. Born in London, but a New Yorker for over two decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space.
He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020.
Prior to working in tech journalism, Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.
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