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The importance of measuring ROI

Kate Elizabeth — 30 January 2019


You’ve developed a campaign that’s on-brand, on message and on budget but how do you know for sure that it’s delivered real bang for your buck? Organisations across all industries can benefit from taking the time to measure a campaign’s return on investment (ROI).

What is ROI?

Specifically, ROI is the gain an organisation makes from a campaign or operation, divided by its cost and the result presented as a ratio or percentage. More broadly speaking, ROI measures how efficiently an organisation operates and how effectively campaigns are received.

Why measure ROI?

Collecting data on campaigns is essential to the operational success of an organisation. Measuring ROI allows an organisation to calculate the success of a campaign and set benchmarks for future campaigns. It also alerts an organisation if something misfires, allowing it to quickly re-evaluate or reshape a campaign and avoid wasting time and money on something that simply isn’t working.

How is ROI calculated?

Success is measured differently across organisations and campaigns so there is rarely a one-size-fits-all approach to calculating ROI. For some, success means a spike in sales, for others it’s a spike in website clicks. Such metrics are relatively easy to gather and analyse but what about those goals that can’t be readily quantified? How does a business measure whether brand awareness grew or how many people saw a billboard?

Battery World National Brand Manager Rachael Matheson works with 110 franchised stores across Australia. She said Battery World delivers five national marketing and advertising campaigns each year, uploading all branding, assets and marketing content to Outfit for franchisees to use for complementary local store marketing activities.

“A lot of the advertising we do is actually brand awareness and it’s obviously very hard to identify that,” Rachael said, adding that a creative and flexible approach was needed to measure Battery World’s ROI.

“So, at the end of every campaign, we compile a wrap up report that looks at the sales that were generated during that period and what activity was conducted. We then look at that campaign in terms of ‘did we meet our objectives?’ It might be about driving foot traffic or it might be about selling a particular number of units so it’s not necessarily about calculating a standard ROI.”

What does ROI teach?

Measuring how a campaign fared against its objectives and goals goes beyond simply reviewing sales targets, Rachael said. Battery World’s end of campaign reports also analyse spending habits and calculate its effectiveness in reaching potential clients and influencing consumer behaviour.

“We look at all the different areas of a campaign and see which were strong or stable and which had weak points so we can address any gaps or opportunities and improve on them in the next campaign,” she said.

How does media influence ROI?

Rachael said Battery World received regular data from its media agency reporting where consumers were most engaged and where the company gained the greatest traction. These metrics enable Battery World to direct its marketing budget to target those mediums that best position a given campaign in front of a customer’s eyes.

“Our business can be quite seasonal,” Rachael explained.

“How people consume media over the summer period compared to how they consume media over winter can be quite different. Because we sell products that are suitable for camping, boating and outdoors, over the summer we find that people who consume those products are outdoors so are more likely to observe outdoor signage or be in their car, listening to radio.”

How does Outfit calculate ROI?

Outfit employs several elements when calculating ROI. We calculate your current cost of production as well as demonstrating the time your design team gets back and the reduction in lead times to demonstrate the ROI of the platform.

How can Outfit deliver ROI for users?

Battery World uses Outfit as its local store marketing platform to support its national campaigns. By uploading all branding and marketing material and making it available year-round, franchisees also have the power and flexibility to craft local campaigns to better service their own markets.

“Last year, we focused on getting used to the Outfit platform and encouraging activity, this year is about helping our franchisees check how that activity performed and using those findings to plan their activity for the year ahead,” Rachael said.

“Then, franchisees can check their ROI to make sure their campaigns are generating strong activity and they can influence or change their direction if they need to.”

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