Measuring ROI on marketing initiatives is always a challenge.

It can be difficult to pinpoint exactly how much business mileage a data center is getting out of the time its marketing team spends on social media posts, blog entries, and other forms of digital media.

It’s easy enough to track how many people use and interact with those assets, but how many of them contribute to the data center’s bottom line by becoming a client?

Subscribe to the  Data Center Sales & Marketing  (DCSMI) Update Newsletter

According to MarketingProfs, only 26% of content marketers felt they could track their ROI. That only means that doing so is a challenge, not impossible. Marketing may not be an exact science yet, but it’s getting there.

Calculating Basic ROI

A basic -and popular- way of calculating a marketing effort’s ROI is to take the data center sales growth during the period being measured, subtract all marketing costs, and then divide the result by the marketing costs to get ROI. So if sales went up by $5,000 and the campaign cost $1,000, the basic ROI is 400%.

An ROI of 400% would be an impressive result, but such a simple calculation does not reflect reality. More has to be taken into account, such as historical sales growth.

Subscribe to the  Data Center Sales & Marketing  (DCSMI) Update Newsletter

ROI from Marketing Campaigns

With marketing campaigns, the assumption is that any growth in the data center business is due to the campaign itself. Still, it’s important to have monthly comparisons to measure its impact more clearly. The 12 months leading up to the campaign will help calculate the organic sales trend, which then is deducted in the ROI calculation.

For example, if organic growth averages 5%, the ROI calculation must account for that. If a data center runs a social-media campaign valued at $3,000 for a month and the monthly sales growth is $5,000, a marketer can subtract the sales growth from the campaign cost, divide the result by the campaign cost, and then subtract 5%.

($5,000 - $3,000) / $3,000 = 67%
67% - 5% = 62%

Most marketing campaigns yield a modest result; however, the essential formula can provide a reasonably accurate insight into marketing ROI.

More Challenges

The calculations above do not necessarily apply to all goals. A lot of marketing campaigns are oriented around increasing brand awareness, generating more leads, and other results that are not easy to measure in dollars and cents.

For example, the data center marketing team may get site visitors to sign up for monthly tip sheets and pass on the emails to the sales team for follow-up. In this instance, the ROI is measured by how many email leads convert into data center clients over time.

The ultimate ROI of any marketing initiative should be an increase in sales over time. It is important to be reasonably patient, as it can take time for results to appear. But, if the targeted sales growth does not happen, the campaign might not be correct for its intended audience, and a different approach is warranted.

The Bottom Line

While metrics are seldom perfect, they can provide valuable insights as well as proof of progress and create a foundation for better marketing ROI tracking in the future.

Do you struggle to measure your marketing efforts? Let us know in the comments below.

Subscribe to the Data Center Sales and Marketing Newsletter (DCSMI)

Submit a comment