For the first time in several years, marketers are being hit with the dreaded words: budget cuts.
According to Gartner’s CMO Spend Survey, marketing budgets have officially stalled for the first time in three years. It’s becoming more and more critical to assess and report on the allocation of (a potentially dwindling) budget.
When was the last time you took inventory of how you’re tracking overall marketing budgets? Tracking budgets across a variety of marketing categories is the first step to tying spend back to results—aka the ever-challenging marketing return on investment (MROI) equation.
In a Harvard Business Review article, Amy Gallo (@amyegallo) highlights the following benefits of tracking MROI:
- Helps justify marketing spend
- Aids in deciding what marketing campaign to put spend toward
- Allows teams to compare marketing efficiency with competitors
- Holds the marketing team accountable
However, Gallo also points out the ongoing challenges of calculating MROI, including lag time, incremental financial value and closed-loop reporting—just to name a few. On top of these challenges, it may feel intimidating to pull the correct metrics when starting from the ground up.
Fear not marketers, for 2018 can be the year that your team finally defines and quantifies your MROI with the right metrics. First, you’ll need to compile your costs before calculating MROI. Below, we highlight five must-have marketing costs to track, followed by key metrics to calculate that will help you get one step closer to discovering your team’s MROI.