The Return on Marketing Investment for Inbound: 4 Facts You Should Consider
As an entrepreneur, your ultimate aim is to increase revenues and grow your business to the next stage, so the last thing you want is to see profits failing to materialise due to increased costs.
Careful budgeting is key to business success, but there is a fine line. As you may already have realised, trying to take a cheap DIY approach to marketing doesn’t work.
You may even have lost money in the past and found yourself back at square one. The truth is that you need to invest to see powerful results from your efforts.
And it’s no different when it comes to inbound marketing.
Like any initiative, investments need are required. The big question is this: are you getting the marketing return on investment (ROI) that’s going to provide the resources you need to achieve your goals?
Measuring your marketing return on investment is a strategic necessity, with real-time quality data driving good decision making.
However, the problem is that many entrepreneurs are becoming disheartened by their data, resulting in them throwing away their efforts.
Here are four things to keep in mind when considering the ROI for inbound marketing.
1. Inbound Marketing Takes Time
A report by LinkedIn suggests that the average B2B sales cycle lasts for six months, yet 77% of marketers attempt to measure their marketing return on investment after just one month.
The inbound methodology is firmly rooted in the buyer journey, so it’s not surprising that measuring ROI mid-way through the journey will produce results that may not truly reflect the efforts put in.
Our experience suggests that it can take between 6 and 12 months to see the real impact of inbound marketing, particularly for websites that have low traffic or domain authority.
It can be difficult to get to grips with if you’ve become accustomed to the instant gratification of outbound marketing.
2. Marketing ROI Comes From Multiple Sources
As previously discussed, the inbound methodology is about enhancing the buyer journey right through from the awareness stage to the decision stage; it’s not just about sales.
So when calculating inbound marketing return on investment, you can’t look at sales alone.
It’s vital to consider all the different ways that inbound marketing can impact the organisation, including
- Website traffic
- Social shares
- Email clickthroughs
- Time spent on page
- Downloads and more
It’s easy to overlook one or more factors.
The Digital Marketing Institute reports that a quarter of B2C marketers fail to measure ROI from their content strategy. It is essential to determine the right metrics to measure ROI.
3. ROI Will Differ by Approach
There are many different approaches to inbound marketing, including content creation, social media, and storytelling via video marketing.
It’s important to remember that your marketing return on investment may vary - quite considerably - depending on the types of campaigns you’re running at the time of measurement.
Different inbound techniques deliver different results, with Statista noting that the highest marketing return on investment typically comes from SEO (so it’s incredibly important you understand how to improve organic search results, while social media delivers the lowest.
But even within these categories themselves, there’s scope for variation. HubSpot’s Not Another State of Marketing Report shows the most significant returns from Facebook and the smallest from Pinterest.
4. It’s Not an Exact Science
Deloitte Director Paul Magill, writing for the Harvard Business Review says:
Despite the latest technologies that enable marketers to track the buyer journey right through from start to finish, it remains impossible to track prospect behaviours or opinions with 100% accuracy fully.
Reputation, for example, is one very tricky metric to measure. Marketers should remember that marketing ROI is always subject to error.
The Importance of Marketing Return on Investment
As a business leader, you see the value in numbers; in facts and figures.
And you’re not alone. LinkedIn’s ‘The Long and Short of ROI’ report suggests that more than half of business leaders want to see marketing return on investment data before approving further plans or allocating future budgets.
Marketing return on investment plays a significant role in business growth. So it’s essential to understand how to calculate ROI and, most importantly of all, it’s vital to know why ROI data may not seem to fully reflect the financial and time investments that have been made so far.
Taking a realistic approach to marketing return on investment is essential.
Don’t be tempted to ‘can your efforts’ and undo all your hard work because things don’t appear to be working out on paper.
Instead, consider these four vital facts, allow time for your efforts to materialise, and remember that the right approach will bring proven results.
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