By Charles Lee Mathews. Every marketer wants to know whether they’re getting a good return on investment, but there is still no agreed definition of what “good” looks like. Industry experts explain why benchmarking ROI has become one of marketing’s toughest measurement challenges.
What counts as a good return on investment depends on what is being measured, say the experts. ”This is no longer a simple one-line answer; it has become far more detailed and interconnected,” says Ryan Sauer, CEO and Founder of Redwood Analytics.
“ROI benchmarks vary wildly depending on who’s doing the measuring. Is there an industry-agreed definition of ‘good’ for digital versus traditional, or are brands essentially comparing apples to spreadsheets? No, there isn’t even a definition by sector, such as insurance,” he says.
“Return on Investment isn’t just a cost per lead or a cost per acquisition. Now it also includes retention. I don’t think this can be reduced to a single number, and stating a ‘good’ number would be a disservice to the complexity of marketing and media measurement,” Sauer says.
But is it “good” enough?
“There is a significant gap in what qualifies as ‘good’ ROI, depending on which vertical we are looking at,” says Petra Eastaugh, digital portfolio lead at Connect, part of the Up&Up Group. “ This is compounded by the channel being measured. ‘Good’ ROI will look very different in fintech compared to FMCG,” she says.
“A better way to approach ‘good’ ROI is to set up the systems which can most accurately report on it. Specifically accurate tracking and strong data signals. This should then be measured in the same way year on year. ‘Good’ would then be a significant improvement on ROI month on month and year on year,” says Eastaugh.
Setting benchmarks is complicated: traditional media focuses on broad awareness (reach), while digital media enables direct, immediate conversion tracking (clicks and CPA).
The problem with tracking value
“Work that builds brand equity is by its nature more difficult to track, whether it’s traditional or digital media,” says Eastaugh. “The beauty of digital is that platforms have developed ways to signal the value derived from brand work, for example, using brand-lift studies and incrementality studies, which help validate impact in the upper funnel and mid funnel,” she says.
Digital promised accountability — every click, every conversion. So why, 15 years in, are so many CMOs still unable to say with confidence what their digital spend actually returns, MarkLives MEDIA asks Sauer.
“It has become fragmented in channel spend, and attribution looks back at windows and pixels, which all channels are trying to offer to be seen as performance relevant. Search conversions are consideration-focused. While social is discovery and engagement-focused. Intelligent, multiple-channel marketing is more difficult to measure,” says Sauer.
Less than optimum analytics
“Even with the last-click method being the easiest and most accurate, creative campaign naming, and analytics are not set up to the optimal level. Mature data, organised over multiple years of marketing, begins to create a picture, but it is becoming a long-term science that requires a view of macroeconomics as well,” he says.
Turning to traditional media, which has always played a long game on brand equity, Sauer says that brand recognition is challenging to measure and attribute over time.
“How do you measure the television squeeze back for Spur (sponsors of the Springboks) during a rugby match? How many racks of ribs did that ad sell? When did it sell them, exactly? What is ‘rigorous measurement’? Traditional media plays an important role in marketing, but it just doesn’t have a last click attribution,” Sauer says.
Brands miss opportunities
Researchers argue that directly comparing the performance of traditional and digital media without an omnichannel attribution model is misleading. It also risks wasted resources and missed opportunities for brands.
Despite its click attribution, digital has its own problems. Research by PwC shows that between 30% to 90% of digital campaign impressions are not delivered fully as intended due to “inefficiencies within the media advertising ecosystem”.
PwC lists the challenges that businesses face in achieving optimal results as the misalignment of campaign objectives and setup with execution and reporting; inadequate or incorrect audience targeting; suboptimal ad placements; ad fraud issues; and misallocated budgets.
Increasing complexity
Each of these challenges greatly impacts campaign performance. “A key issue is that digital metrics don’t always translate into business outcomes,” says Eastaugh. “But as digital teams, we need to help translate in-platform metrics and align them with business outcomes,” she says.
“With the right systems in place, digital spend and the resulting ROI can be tracked accurately. For instance, a robust app-tracking platform integrated at the start of a fintech app’s life can give leadership a clear sense of which paid digital channels are driving the most in-app revenue with minimal friction,” Eastaugh says.
Build uniquely as you go
What’s the best way forward? “The best ROI tracker is the in-house one built to reflect actual conversions seen client-side. This conversion data, overlaid with the platform spend data, is the best ‘source of truth’ for ROI,” she says.
Sauer suggests setting ROI benchmarks intelligently with a model and knowing what you are measuring as a single hero metric. “Not 65 different KPIs. A single hero metric. Setting that and making sure all stakeholders understand the ‘one number’ is the challenge,” he says.
For media professionals, chasing a plug-and-play industry benchmark is a legacy mindset ill-suited to a fragmented ecosystem. With digital platforms offering self-serving attribution windows, and traditional channels resisting immediate quantification, relying on external definitions of “good” risks wasting budget.
The better approach is to cut through the noise of 65 conflicting KPIs and enforce internal discipline: a bespoke, client-side source of truth, with stakeholders aligned behind a single, hero metric. That’s how brands stop comparing apples to spreadsheets and start measuring what actually moves the needle.
Charles Lee Mathews is a senior editor to MarkLives MEDIA and a senior writer to MarkLives.com, as well as co-founder of The Writers, a writing consultancy.
