Ivan Temelkov
August 10, 2016

Why Most Businesses Are Wrong About Marketing ROI

31280508 – businessman drawing roi (return on investment) with graphs

Marketing ROI is all the rage for companies. As a matter of fact it’s the only thing that some of them truly care about when it comes to marketing. Why not, right? The world runs on currency, so quantifying your marketing ROI seems like the best thing. This is precisely where most companies are completely wrong when it comes to understanding marketing ROI.

We live in a digital age where community building, direct-to-consumer sales, social engagement, and organic and grassroots business development, stand of utmost importance. A lot of the engagement elements I mentioned above do not have any direct correlation to ROI. Sure, building your community of potential customers and brand advocates matters. But you simply cannot put ROI on these things. Companies seek instant gratification when it comes to identifying their marketing ROI. It has been that way for quite some time.

Setting Realistic Expectations of Marketing ROI

As a business owner in a service-based industry I’ve identified the lack of establishing realistic expectations. A lot of other service-based providers tend to fail at communicating realistic expectations to their clients. This is one area where brands across all industries tend to develop a huge misconception. Let me explain.

  • What is the ROI of Twitter?
  • What is the ROI of Facebook?
  • What is the ROI of Google?
  • What is the ROI of a Pay-Per-Click marketing campaign?
  • What is the ROI of content marketing?
  • What is the ROI of mobile optimization?


I am certain that majority of you reading this have heard or asked similar questions. We all have! But that’s just it though. Not having realistic expectations about your marketing ROI can be detrimental. As a matter of fact, certain companies will go as far as developing unrealistic interpretations of their investment based, on false expectations.

The Chicken or the Egg Dilemma

A basic problem with marketing ROI pertains to a chicken or the egg dilemma. It is due to the fact that companies still think that modern day marketing is a selective process. In the digital era, this is precisely where the consumer has a voice and omni-channel advertising stands of utmost importance. In order to achieve optimal marketing ROI, it’s important to understand the necessity behind omni-channel. Additionally companies should develop an understanding and appreciation behind the necessity of a sequential approach in modern marketing.

Small businesses struggle with the chicken or the egg dilemma quite often. Predicting marketing ROI from small investments tends to set an extremely high bar for expectations. This is where one very common delusion about marketing ROI tends to develop. It takes money to make money. Most small businesses do not put forth valiant marketing investments, yet expect a substantial marketing ROI.

Appreciate the Modern Consumer Mentality

The digital era is creating a huge disruption for companies. Many of these companies are not taking strong consideration of the intelligent, sophisticated and informed consumer. Especially in a world where 80% of internet users own a smartphone (Source). Additionally, 48% of internet users begin their online experience with a Search (Source). What companies these days do not understand, is that these shifting trends and patterns have direct impact on marketing ROI.

As consumers, we are becoming lazier, and our attention span is shrinking by the day. These developing trends directly affect our engagement and interest. As a result, it also impacts marketing ROI results for companies. One of the current main challenges that companies must rectify is developing a thorough understanding of the landscape. Being unable to engage, communicate or convert consumers into customers, is business threatening dilemma. Truth be told, a lot of companies are not spending enough time and resources on market research or assessment of their own brand.

Time Is Of The Essence

Time, and timing for that matter, are truly of an essence when it comes to marketing. Companies must understand that consumers need to be reached on the right platform, at the right time,  and day. Anything that comes to fruition in marketing and ultimately generates ROI, will take some time. Sure, launching a targeted PPC or Social Media campaign may in fact provide you with the targeted boost you’ve been seeking. Although at the end of the day, it may or may not generate any desirable ROI.

Time plays a significant role in marketing ROI. This is precisely why it’s important for companies to plan a long-term strategy. The current state of digital market is like a moving target. Being able to maintain pace and momentum is extremely difficult. This is where time plays a significant role.

Outlining Your Success Metric or KPI

One of the biggest mistakes that most companies make when it comes to marketing ROI, is the ability to identify their success metric. Without a success metric or KPI, it is extremely difficult to maintain a steady pulse on your marketing endeavors. This is one reason why marketing tends to fail as well. Companies must understand that identifying your success metric can make all the difference in rectifying your marketing ROI.

Some actual examples of a successful ROI metric include:

  • A form completion on a website.
  • A phone call from a website. Either a desktop, tablet or from a mobile device.
  • A download such as a whitepaper, that offers value to your customers.
  • A view through a specific page on a website.


How do you measure your marketing ROI?


Image: Copyright: ‘http://www.123rf.com/profile_melpomen‘ / 123RF Stock Photo


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A digital marketing practitioner bringing nearly two decades of seasonality to the table with emphasis on Search, Social, & Content. I'm enthused about helping small businesses increase their digital footprint by utilizing the power of technology, web, strategic thinking, and targeted execution for maximum market penetration. CEO of @RazorSharpDigit, a human-centric digital brand but can be found @ivan_temelkov on Twitter as well.