What Is Marketing ROI and How Brands Are Using It

Marketing ROI is one of the most important metrics brands can use to understand whether their marketing efforts are truly driving business impact. By measuring the exact return of every dollar spent, marketers can identify what’s working, optimize performance across channels, and make overall more informed decisions about future investments and strategic initiatives.

ROI (return on investment) in marketing is the measurement of profit (or loss) in comparison to cost in relation to marketing activities or tactics. Simply put, marketing ROI is how much money you gained or lost compared to how much money you spent. The purpose of tracking marketing ROI is to help measure overall marketing impact on business goals.

Measuring and tracking marketing ROI isn’t just important; it’s mandatory. If brands aren’t tracking the ROI of their marketing efforts, then they’re actively running in circles, wasting resources, and leaving profit on the table. If you are running campaigns, launching products, and moving on without tracking your ROI, you’re missing key learnings. You’re also leaving impact on the table. Time and resources are too valuable to spend without knowing what’s working

While measuring marketing ROI may feel daunting, the formula is actually simple:

(Revenue From Marketing - Marketing Cost) / Marketing Cost x 100 = %

The tricky part is tracking each individual effort, what you spent, and what you earned. It can get a bit more complicated when you’re pulling from individual channels and trying to combine results, so it’s often more effective to measure for channels individually. You’ll see exactly what’s driving results, and by how much.

Which Marketing Channels Should You Measure ROI For?

Knowing which channels to track ROI for is the next hurdle. Not every marketing channel will look the same when it comes to ROI, but that doesn’t mean some should be ignored. Any channel you’re investing time or budget into is worth measuring. The goal isn’t perfection, it’s clarity. When you know what’s driving results, you can double down on what works and rethink what doesn’t. While this isn’t an exhaustive list, these are the most common and valuable channels for brands to track ROI for: 

• Social Media: Measuring social media ROI is challenging, but impactful. Social as a channel encompasses so many moving parts and intangible concepts, but once you find the right formula and metrics to track your social media ROI, you’re better equipped to understand exactly what assets and channels are making their mark. 
• Digital Advertising: Tracking ROI on your digital advertising is non-negotiable and also extremely easy. You likely already have programs in place that show how much you’ve spent, how much you’ve made, and may even automatically calculate the ROI for you. Use these results to help inform ad creative and concepts moving forward. 
• Email Marketing: Email marketing is often a high ROI channel because it’s relatively low lift and can drive big results. It’s also easy to measure using metrics like open rates and link clicks. With that insight, you can see what resonates with your audience,  refine your copy, and tweak your design to make links more compelling. ‍
• Event Marketing: Events are one of the most important channels to track ROI for. They are often high-investment activations that require significant marketing budget and team resources. Measuring ROI for each event helps you understand what worked, whether it was worth the cost, and if it’s something you should repeat, or rethink next time.

Once you understand your marketing ROI, the real value comes from how you use it. It isn’t just a performance metric; it’s a decision-making tool. Brands use it to evaluate success, guide investment, and plan smarter marketing campaigns moving forward.

Measure Performance

The most direct way to use marketing ROI is to evaluate how specific campaigns performed. If your ROI is positive, you know your campaign was a success, and it’s a strong candidate to repeat or optimize.  Over time, ROI also helps you set baselines and benchmarks, so future campaigns have clear performance targets to meet.

Justify Spend

Marketing plays a major role in every brand's overarching success story. That being said, marketers often still have to fight for their fair share of the budget. Measuring marketing ROI makes it easier to advocate for more investment with VPs, CEOs, and other stakeholders. It clearly connects spend to results, showing impact in a simple, easy-to-understand way.

Distribute Budgets

One of the biggest benefits of tracking ROI is seeing exactly which tactics are contributing to your results. With that clarity, it’s easier to allocate your social media budget across channels accordingly. If you notice your social media efforts are generating the strongest returns, while email is underperforming, ROI gives you the proof you need to shift spend and build a healthier, more effective marketing mix.

Which metrics are critical for measuring marketing ROI?

When measuring your marketing ROI, the goal is to connect effort and spend to real business impact. While the exact metrics will vary by channel, these are the most critical ones to track across the board. Financial metrics like CAC (customer acquisition cost), sales revenue, and ROAS (return on ad spend). Lead metrics like conversion rate, CPL, (cost per lead), and AOV (average order value) will give insight into how your tactics are converting. And lastly, engagement metrics like CTR (click through rate), website traffic, and brand awareness metrics (impressions, engagement rate, etc.) to see how users are responding.

What is a good marketing ROI ratio?

A good marketing ROI varies by industry and channel, but 3:1 is generally considered solid (about $3 earned for every $1 spent). 5:1 is strong, and anything higher is excellent.

Quick rule of thumb:

• <1:1 = losing money
• 1–2:1 = near break-even
• 3:1 = healthy
• 5:1+ = high-performing

Context matters. Some channels take longer to pay off. The best benchmark is your own ROI over time.

Why is it difficult to measure ROI for marketing?

It’s hard to measure marketing ROI because results aren’t always direct or immediate. Customers touch multiple channels before converting, so attribution is messy. Some efforts (like brand awareness) drive long-term impact that’s tough to tie to revenue, and data often lives across different tools, making it harder to connect spend to outcomes.

Which tools are useful for tracking marketing ROI?

Useful tools for tracking marketing ROI include Dash Social for social media campaign reporting, GA4 for website traffic and conversion data, and HubSpot or Salesforce to tie leads and revenue back to specific efforts. Together, these tools make it easier to connect spend to performance and understand what’s driving results.