
How do you calculate digital marketing ROI? A guide for strategic growth
Digital marketing strategy can get expensive fast. And when your data doesn’t make sense—or worse, when there are no numbers at all—you’re flying blind. That’s how “strategies” start running on vibes and gut feeling instead of actual outcomes. The solution? Clear, consistent ROI tracking.
With a clear understanding of how to calculate ROI in marketing, you can tie your efforts to measurable outcomes, refine your strategy, and drive business growth. In this guide, I’ll walk you through how to calculate marketing ROI, what numbers to track, where most people go wrong, and how to use the data to make better decisions.
Let’s get into it.
What is digital marketing ROI?
Marketing ROI measures the return you get for every dollar you spend on marketing. If you’re putting $10,000 into PPC, how much revenue is coming out on the other side? It’s a profitability check, but more importantly, it connects marketing performance to business performance.
Measuring digital marketing ROI allows businesses to identify effective aspects of their marketing plans and adjust their efforts based on data insights, using platforms like Clearboard and Google Analytics 4 (GA4).
Calculating ROI
The basic formula to calculate ROI looks like this:
ROI = (Revenue from Marketing – Marketing Costs) / Marketing Costs × 100
So, if you spent $10,000 and generated $50,000 in revenue, your ROI is:
($50,000 – $10,000) / $10,000 × 100 = 400%
You made four bucks for every dollar you spent.
Why does ROI in marketing matter?
Your marketing budget isn’t infinite. ROI gives you a way to evaluate what’s working, what’s wasting money, and where to double down. It brings accountability to marketing and helps align your efforts with actual business goals.
Breaking down the key components of marketing ROI
Revenue generated and attribution
You can’t calculate ROI without knowing how much revenue your marketing actually influenced. This often involves tracking:
- New customer revenue: Sales from leads generated by specific campaigns.
- Recurring revenue: Ongoing revenue from customers initially acquired through marketing.
Attribution is the tricky part. Your CRM or analytics platform can help connect revenue to campaigns, but the picture is never perfect. Some sources, like referrals, brand mentions, or word of mouth, won’t always show up in reports, even though they clearly drive business. You’ll get partial visibility, not a full accounting.
Marketing costs
Marketing costs aren’t just ad spend. If you’re only counting your PPC budget, you’re underreporting. A real cost analysis includes:
- Ad spend: Your paid search, social, and display advertising budgets
- Creative: Expenses associated with designing, writing, and producing assets (this can include the costs of purchasing stock images and fonts, your website hosting, and other creative expenses associated with the creation and publication of your marketing)
- Tools: Analytics platforms, CRMs, marketing automation tools, and artifical intelligence (AI) models
- Labor: Salaries, freelancers, agencies. If humans worked on it, it’s a cost
RELATED: Is your PPC budget driving maximum ROI?
Dealing with challenges in attribution
Let’s be honest: full attribution isn’t attainable anymore. Even with server-side tracking, privacy updates and ad blockers are cutting off the data. That doesn’t mean you throw up your hands—it means you get smarter.
Use these indicators as proxies for impact when you can’t get a clean conversion path.
- Increases in branded search volume
- Overall site traffic lifts
- Growth in direct traffic or returning users
And then there’s the attribution model debate: first-touch, last-touch, or multi-touch?
Multi-touch is more accurate, since it reflects the full customer journey, but it requires a strong data infrastructure. If that’s not feasible, a consistent first- or last-touch model can still deliver valuable insights.
Step-by-step: How to calculate digital marketing ROI
Step 1: Define your goals
Start with your desired outcome for your marketing campaign. Are you trying to drive leads, increase revenue, reduce churn? Vague goals lead to fuzzy insights. Be specific about what success looks like for your firm.
Step 2: Track the right metrics
Your ROI is only as good as the metrics feeding it. Consider tracking the following KPIs (key performance indicators).
- Conversion rate: Leads to customers
- Customer acquisition cost (CAC): What it costs to land a customer
- Customer lifetime value (LTV): The total revenue you get from a customer over time
Step 3: Use the right tools
Don’t try to do this in a spreadsheet. Instead, lean into a comprehensive suite of services. (Or consider an analytics platform, like Clearboard, that integrates all your data in one place.)
- Analytics dashboards: Platforms like Clearboard and Google Analytics monitor real-time performance, including website traffic
- CRMs: HubSpot, SharpSpring, and industry-specific CRMs can tie revenue back to campaigns
- Attribution tools: Some platforms, like HubSpot, also provide insight, helping you understand channel contribution
Step 4: Analyze and act
ROI isn’t just a number, it’s a decision tool. Use it to:
- Compare campaigns
- Reallocate budget
- Identify areas to cut or scale
RELATED: What is data-driven marketing?
Common pitfalls (and how to avoid them)
Chasing vanity metrics
Time on page isn’t revenue. Neither are likes, impressions, or bounce rates. These numbers might make a report look good, but they don’t help you make business decisions. Focus on metrics that connect to revenue.
Cutting long-term efforts too early
Some tactics, like SEO and content marketing, take time to show results. While they may not deliver immediate ROI, their long-term impact can far outweigh their short-term costs. While measuring KPIs, make sure you consider metrics that take the long-term view, like customer lifetime value.
Additionally, digital marketing campaigns enough time to develop. Many times, we see organizations shift budget away prematurely from slower-developing digital marketing efforts. This often costs them critical growth opportunities. A good agency should help set realistic timelines on when you should start seeing return.
Ignoring external variables
Regularly review your ROI in context to ensure you’re not overestimating (or underestimating) its performance. Market shifts, seasonality, and economic conditions can affect results. Compare your performance against similar periods, and look at trends over time.
ROI without context can lead you to the wrong conclusions.
RELATED: Data literacy for leaders: How to read, interpret, and act on your marketing insights
Beyond the numbers: What to do with your ROI data
Understand your marketing investments
Let digital marketing ROI tell you where to invest more, and where to stop spending. Look at each marketing channel, including social media marketing, email marketing, SEO, and PPC advertising. If PPC is producing a 5:1 return on investment and social media advertising is at 1:1, it’s clear where your next dollar should go.
Continuous improve and refine your digital marketing
Maximizing digital marketing ROI isn’t a one-and-done effort, it’s a process of continuous improvement. For example, if your PPC campaigns have a high click-through rate but a low conversion rate, maybe the landing page needs work, or the offer isn’t compelling enough.
By regularly reviewing ROI at the channel, campaign, and even content level, your marketing team can spot patterns, identify what’s truly driving results, and reallocate budget toward high-performing efforts. Over time, this creates a feedback loop where your marketing grows more efficient, more targeted, and more effective with every iteration.
Build systems that scale for the future
It’s not just about short-term wins. Marketing ROI should be repeatable. Build your marketing systems with that in mind: connected tools, clear attribution models, and defined processes. When you can trace revenue back to specific marketing campaigns or touchpoints, you’re not just measuring success—you’re learning how to replicate it.
This information helps you to automate what works, document best practices, and confidently scale your efforts across new markets and audiences. With the right infrastructure in place, your marketing can evolve from a series of one-off wins to a well-oiled machine that consistently delivers results—and grows more efficient over time.
LaFleur: Let’s channel you marketing ROI, making it a management tool
ROI and attribution bring clarity to your marketing efforts. They push teams to spend smarter, focus on what works, and grow with intention. Instead of guessing which marketing channels or campaigns are pulling their weight, you can rely on data that connects dollars spent to results achieved. When used well, ROI guides budget decisions, surfaces your most profitable efforts, and lays the groundwork for scalable, sustainable marketing growth.
If you’re tired of guessing what’s working, it’s time to fix your measurement strategy. Schedule a consultation or demo of LaFleur’s analytics dashboards. We’ll help you see what’s driving results—and what isn’t.