Demand Generation Marketing
Before data made marketing effectiveness more measurable, most ad spend was an act of faith. Marketers believed their spending was working; they just had a hard time proving it. As the famous line attributed to retailing pioneer John Wanamaker puts it, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Fast forward more than a century since the quote, and we see an industry that still struggles to flag waste. Unlike Wanamaker though, we have the data to calculate marketing ROI almost across the board. We also have the tech to optimize marketing spend at scale, yet until recently, few marketing teams have made marketing ROI a priority. We recently asked webinar attendees to grade their teams as it pertains to calculating marketing ROI. Two-thirds of respondents said they were either “just starting to learn it” (62.2%) or “What’s ROI?” (3.7%).
No matter where your team is on the ROI-calculating continuum, you’ll find plenty of tips on this page to better understand marketing ROI and how to calculate your marketing ROI on LinkedIn.
At its highest level, ROI is a very basic equation (below). We’ll help you master it from a marketing sense.
Ad-Sourced Revenue ÷ Ad Spend = ROI
By climbing the curve of marketing math success, you’ll realize a more mature approach to measurement, one that goes far beyond the click to ultimately capture the ad-sourced revenue that enables marketers to calculate ROI.
Simply put, you want to be able to look at an ad and see exactly how many conversions it has generated. Ultimately you want your ad to turn into a lead and then into a customer.
Many marketers begin at the left-hand side of the curve, focusing on CPS and CTR, but these don’t tell the whole story. Top marketers invest more time on the right side of the curve, learning which actions and ads lead to actual conversions.