Understanding Marketing ROI

marketing roi

There’s an anecdote in Luke Sullivan’s “Hey Whipple, Squeeze This” about Evian creating a massively popular viral video featuring babies on rollerskates, only to have their profits decrease substantially. As far as marketing efforts go, generating 80 million views on YouTube might seem like a slam dunk. How did a misstep seem to be such a runaway success?

As marketers, a big part of what we do (or, some may argue, the entire point of what we do), is generating interest. Whether we’re marketing a product or service, an event, or even ourselves, our goal is to get the attention of as many people as we can.

For a long time, it was difficult to gauge how successful a campaign was, and the most reliable indicator was the bottom line. This proves true even today, especially for larger companies, who may not be able to analyze how successful a particular campaign was until months afterwards.

Luckily, we now have the technologies and tools to collect and analyze the return on investment (ROI) of marketing, in both the short- and long-term. We have moved away from the randomized chaos of mass media and have started to focus on measurable and repeatable successes.

(For an example of such random chaos, think of any given television commercial. There are a ton of increasingly complicated questions that drill down into two major, at times incalculable, data points: how many people are seeing a specific commercial, and how many people are ultimately purchasing what’s being advertised.)

In the short-term, marketing ROI usually correlates to the cost of any one specific and measurable action, like bidding on Google AdWords in order to increase website traffic or conversion rate, or spending money on paid advertising for a single marketing campaign.

In the long-term, marketing ROI becomes a bit more difficult to measure. Without diving too deep into a frightening and confusing rabbit hole, long-term ROI calculations involve trying to put a value on more incremental facets of a business, such as brand awareness, in order to generate an overall brand valuation.

In simpler terms, how much a brand is worth as a result of marketing efforts, irrespective of how much the business itself is actually worth.

Ultimately, the idea behind the concept of ROI is to spend your money or time in order to earn something in return. If the value of what is earned is greater than what you spent, you have a positive ROI. 

When it comes to marketing, anything is worth trying once, but in the greater scheme of things, it is virtually impossible to calculate or determine the ROI of something in advance. We can base our expectations off of previous iterations, but no two campaigns will ever be identical.

While general analytics tools can tell us a lot about our audience and give us a better chance of successfully getting their attention, we ultimately can’t force them to be interested in what we’re showing them.

It’s also completely possible that the unexpected may happen. In Evian’s case, people cared more about the advertisement than the product, and soon afterwards the company threw the babies out with the bathwater.


Matt Rawle is a freelance copywriter currently residing in the Middle of Nowhere (also known as Shelburne, Nova Scotia). For more of his thoughts on marketing, check out his stories on Medium; here’s a good one. You can also follow him on Twitter @BasicBon, where he occasionally tweets things not related to video games.