Companies spend a lot on marketing communications. In fact, global spending on media is expected to reach $2.1 trillion in 2019, up from $1.6 trillion in 2014. But is all that money well spent? And more fundamentally, does marketing actually work? Marketing ROI analysis can help answer those questions.
Companies spend a lot on marketing communications. But is all that money well spent? Marketing ROI (mROI) helps companies measure the return on investment. For marketers (and other executives), there are several benefits associated with using this measurement, including: justifying marketing spend; deciding what to spend on, comparing marketing efficiency with competitors; and holding themselves accountable. It’s not an easy metric to measure, because it can be tough to determine how much incremental financial value a marketing program add. It can also be difficult to figure out which incremental profits are attributable to which programs. Measuring the lag time associated with most marketing spending is another common challenge. Despite these challenges, measuring mROI is worth it. Ideally your marketing program is not only affecting sales and profits this year, but is also strengthening your brand equity and customer relationships over time.