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There are a number of things you can do to improve your marketing ROI, such as ensuring you’ve set clear campaign objectives, conducting regular campaign analysis and hiring a professional creative ad agency. But before we get into that, it’s important you understand exactly what ROI is in marketing and what ROI number you should typically be aiming for.
What Is ROI in Marketing?
ROI, also known as ‘return on investment’ is a financial business metric used to measure the profitability of an investment relative to the cost of it. In simple terms, it compares the revenue made from a marketing campaign to how much money was spent on it.
While ROI focuses on getting the most value out of each business expense, it is especially important in marketing where the main goal is to attract high quality paying customers and make money.
Understanding ROI in marketing is an important part of assessing the financial viability of a campaign and helps you determine which marketing efforts are generating the best returns.
What Is a Good ROI Number?
ROI is often shown as a percentage, with a positive (high) ROI indicating that the marketing investment has generated more profit than its cost. In contrast, a negative (low) ROI number shows the investment has not generated enough profit to the cost of the marketing campaign.
In terms of exact figures, it’s hard to say specifically what an ideal ROI number would be, as what might be considered a good ROI for one business might not be the same for another. These figures can vary significantly depending on the industry, business model, timeframe and specific goals of the investment.
That being said, the general rule of thumb for a ‘good’ marketing ROI number is typically a 5:1 ratio, with fantastic ROI being considered at around a 10:1 ratio. Anything less than a 2:1 ratio is not considered profitable.
So, now we’re all clued up on the ins and outs of ROI in marketing, let’s dig a little deeper into how you can improve this figure.
Here are 5 ways you can improve ROI in marketing:
Set clear objectives
Understand your audience
Conduct competitor analysis
Regularly analyse campaign data
Hire a professional marketing agency
1. Set Clear Objectives
Every marketing campaign, whether it’s search engine optimisation, email marketing or social media marketing, you must have clear objectives right from the very start. Is the goal of your campaign to increase sales, lead generation, website traffic, app installs or brand awareness?
Setting clear objectives will help guide your strategies and help you concentrate your resources, time, and efforts on a specific outcome, rather than spreading your resources too thin across various strategies.
Having clear measurable objectives will also provide a basis for evaluation. Once the campaign has ended, you can track its progress toward your goals and assess whether your marketing strategies are delivering the desired outcomes. We’ll chat more about this further down the blog.
2. Understand Your Audience
Another thing that will help you improve your marketing ROI is thoroughly understanding your audience - their demographics, behaviours, personal preferences and especially their pain points.
By knowing exactly who your audience is, you can tailor your marketing efforts to match their preferences and resonate with their interests. For example, by knowing your audience’s language and communication style, you can create messages that resonate with them emotionally. Likewise, you can create content that addresses their specific pain points and provides solutions, leading to higher engagement and conversion rates.
Another important reason why understanding your audience will help to improve your ROI is the fact that you can find out where your audience spends their time online, allowing you to choose the most appropriate marketing channels. This prevents wasting resources on channels that your audience doesn't use.
By analysing your competitors' successful marketing strategies, you can identify best practices, what worked well and various tactics that are driving positive results. This can help to inspire your own marketing efforts and incorporate these successful strategies into your own campaigns to improve ROI.
Competitor analysis can also sometimes reveal gaps in the market that your competitors are not addressing. Once you uncover gaps, you can develop unique solutions or targeted campaigns that cater to unfulfilled customer needs.
4. Regularly Analyse Campaign Data
You should also be regularly analysing past campaign performance as this will provide clear insights into what's working and what isn't. You will be able to identify certain tactics, channels, or strategies that are generating the most engagement and conversions, as well as those that aren’t.
Analysing campaign data also helps you pinpoint the areas of your campaigns that are underperforming or not meeting the expected goals, such as low click-through rates or high bounce rates. You can then make necessary adjustments to improve boost elements and improve ROI.
One of the most effective things you can do to improve your marketing campaign ROI is to hire a professional marketing agency to assist you.
When you hire an agency to help you with your marketing, whether it be for ad creative, SEO or email marketing, the likelihood of a high ROI is significantly increased. This is because their expertise and experience will practically guarantee that your campaigns are of high quality and well-executed for maximum ROI. Outsourcing your efforts to an agency also frees up a lot of your time to focus on other core business activities that need your attention.
We worked with Huel over a two year period where we were able to produce hundreds of assets in 8 different languages. Our high quality ad creative was a key component of Huel's growth strategy and all in all they saw a 10:1 return on investment over the duration of the relationship. Over 100 million views later, Huel has been one of our most successful relationships to date.
We are Aura Ads, a unique performance creative agency designed for D2C eCommerce brands. We help clients sell more online and grow at scale with our bespoke video and static creative delivered on a monthly basis. For more tips and tricks from our experts, head over to our blog page.