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Why Measuring ROI Quickly Poses Challenges for Marketers

Introduction

Welcome to Live with Marketers, a talk show where we bring together some of the brightest minds in marketing to talk shop. My name is Alex Tran, a Content Marketing Manager at LinkedIn, and I will be your host for today's episode on "Why Measuring ROI Quickly Poses Challenges for Digital Marketers."

Before we get started, here are a few housekeeping details:

  • If you're tuning in from Saito, we'll send out the full recording after the event, so don't worry about taking too many notes.
  • Follow along with the hashtag #LiveWithMarketers or our LinkedIn Marketing Solutions Showcase page.
  • To read the full research report referenced throughout the show, visit the agenda section on the right-hand side of your screen.
  • Please complete our brief survey at the end to let us know how we're doing.

Today, I am joined by esteemed colleagues and guests:

  • Ami Trivedi, Product Marketing Manager at LinkedIn
  • Mandy McEwan, CEO and Founder of Mod Girl
  • Andrew Kaplan, Director of Product Marketing for LinkedIn Marketing Solutions

Guest Introductions

  • Ami Trivedi: I'm responsible for research and insights in the LinkedIn Marketing Solutions team.
  • Mandy McEwan: I'm the founder of Mod Girl, an inbound marketing and coaching agency. We're known for our content marketing, lead generation, and brand-building skills, particularly helping Plastic Surgeons and solo agency owners attract high-paying clients.
  • Andrew Kaplan: I've been at LinkedIn for about six years and my team leads marketing and promotion around our advertising solutions. I'm also a karaoke enthusiast.

Quickfire Questions

  1. Who would play you in a movie of your life?

    • Ami: Zoe Saldana
    • Mandy: Kristen Wiig
    • Andrew: Nicolas Cage

  2. What's your favorite marketing metric?

    • Ami: Retention
    • Mandy: Customer Lifetime Value
    • Andrew: Metrics with the word "qualified" or "quality"

Defining ROI and KPIs

We discussed the definitions of ROI and KPIs and how they are often used interchangeably. ROI typically refers to the financial success of a campaign, while KPIs are the most important measurements to determine if you're on track to meet your marketing objectives.

Why Measuring ROI is Complicated

  • Mandy: Different campaign types and timelines can make it challenging.
  • Andrew: It's difficult to know who defines ROI—marketing, sales, or finance.
  • Ami: Understanding the length of sales cycles is crucial for proper measurement.

Calculating ROI

  • Ami: ROI should be calculated as return over the sales cycle divided by investment over the sales cycle.
  • Mandy: For lead generation, calculate metrics like cost per lead, total leads generated, and sales conversion.
  • Andrew: Understanding your business objectives and defining ROI around meaningful engagements and touchpoints is critical.

Common ROI Mistakes

  1. Ami: Measuring too quickly, considering that the average sales cycle is much longer than a month.
  2. Mandy: Not ensuring alignment between sales and marketing teams.
  3. Andrew: Focusing on short-term metrics without considering the long-term impact.

Communicating ROI and KPIs

Communication with stakeholders is essential. Define what KPIs and ROI mean for your business and maintain a regular cadence of reports. This helps set realistic expectations and establishes trust.

Favorite Tools for Measuring ROI

  • Google Analytics
  • UX Tools like Hotjar
  • LinkedIn's Demographic Reporting and Website Demographics

Key Insights and Tips

  • Future-Proof Your Agency: Niche down your services, leverage your personal brand, and use video content to stand out.
  • Measure Properly: Make sure you measure metrics over the correct time frame, include both short-term and long-term metrics, and tell a clear story with your data.

Conclusion

Measuring ROI quickly poses several challenges, from misalignment between teams to using improper metrics. However, with proper planning, tools, and communication, marketers can overcome these hurdles and demonstrate the value they deliver effectively.

Keywords

  • ROI
  • KPIs
  • Digital Marketing
  • Sales Cycle
  • Lead Generation
  • Content Marketing
  • Customer Lifetime Value
  • Brand Awareness

FAQ

  1. What is ROI in marketing?

    • ROI is the return on investment and measures the financial success of a marketing campaign.

  2. What is the difference between ROI and KPIs?

    • ROI measures financial return, while KPIs are metrics that determine if you are on track to meet marketing goals.

  3. Why is measuring ROI complicated?

    • It is complicated due to different campaign types, varying sales cycle lengths, and difficulty in defining who owns the measurement.

  4. When should you measure ROI?

    • Ideally, ROI should be measured over the length of the sales cycle, which can vary depending on the type of business.

  5. How can marketers feel more confident in communicating results?

    • By ensuring clear communication, proper alignment with sales teams, and understanding what matters to their audience.

  6. What tools are best for measuring ROI?

    • Google Analytics, UX tools like Hotjar, and LinkedIn's Demographic Reporting and Website Demographics.

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