How to Measure Marketing ROI (Without a Data Science Degree)
Here’s a conversation I have far too often:
Me: “What return are you getting from your marketing?” Business owner: “I think it’s working… we seem busier.”
“I think it’s working” isn’t a measurement. It’s a feeling. And feelings are a terrible way to manage a marketing budget.
The good news: Measuring marketing ROI isn’t as complicated as the data analytics industry wants you to believe. You don’t need a PhD, you don’t need expensive software, and you don’t need a dedicated analyst. You need a clear framework, some basic tracking, and 30 minutes a week.
The Simple ROI Formula
At its most basic, marketing ROI is:
ROI = (Revenue from marketing – Cost of marketing) ÷ Cost of marketing × 100
Example: You spend £2,000 on marketing this month. You generate £8,000 in revenue from marketing-driven leads.
ROI = (£8,000 – £2,000) ÷ £2,000 × 100 = 300%
For every £1 spent, you got £3 back. That’s a healthy return.
Simple, right? The formula isn’t the hard part. The hard part is figuring out the two numbers that go into it: what you spent and what you earned.
Step 1: Know What You’re Spending (The Easy Part)
List everything you spend on marketing. All of it.
- Ad spend: Google Ads, Facebook Ads, LinkedIn Ads, etc.
- Tools and software: Email platform, SEO tools, social media schedulers
- Agency/freelancer fees: Whoever you’re paying to help
- Staff time: If someone spends 50% of their time on marketing, include 50% of their salary
- Content creation: Photography, videography, copywriting
- Website costs: Hosting, maintenance, updates
Most businesses underestimate their marketing spend because they forget staff time and tool subscriptions. Get the real number.
Step 2: Track What You’re Earning (The Harder Part)
This is where most small businesses fall down. They spend money on marketing but have no way of knowing which revenue came from which activity.
Here’s how to fix that:
Set Up Conversion Tracking
Google Ads: Install conversion tracking that fires when someone submits a form, calls your number, or completes a purchase. This is non-negotiable — running Google Ads without conversion tracking is like driving blindfolded.
Facebook Ads: Install the Meta Pixel on your website. Set up conversion events for key actions (lead form submissions, purchases, add to cart).
Google Analytics 4: Set up goals/conversions for your key actions. At minimum, track form submissions, phone clicks, and purchases.
If none of these are set up, stop everything and do this first. You cannot measure ROI without tracking conversions. Full stop.
Use UTM Parameters
UTM parameters are tags you add to URLs that tell Google Analytics exactly where a visitor came from.
Example:
yourwebsite.com/contact?utm_source=facebook&utm_medium=paid&utm_campaign=spring-sale
When someone clicks that link and fills in your contact form, you know they came from your Facebook spring sale campaign. Without UTMs, they’d just show up as “social media traffic” — useless for ROI calculation.
Use UTMs on:
- All paid ad links
- Email campaign links
- Social media posts (especially promoted ones)
- Any link you share externally
Google’s free Campaign URL Builder makes this easy.
Ask People How They Found You
Old school? Yes. Effective? Absolutely.
Add “How did you hear about us?” to your contact forms, quote request forms, and checkout process. Make it a dropdown, not a free text field (you’ll get more consistent data).
This is especially important for offline marketing (networking, word of mouth, events) that digital tracking can’t capture.
Track Phone Calls
If phone leads are important to your business — and for most service businesses, they are — you need call tracking.
Options:
- Dynamic number insertion: Different phone numbers display for different traffic sources. Costs £30-£100/month depending on the provider.
- Google Ads call tracking: Free if you’re running Google Ads. Tracks calls from ads and your website.
- Simple approach: Use a different phone number in your Google Ads vs. your website vs. your Google Business Profile. Even this basic separation gives you useful data.
Step 3: Connect Revenue to Channels
Now you’ve got spend data and conversion data. Time to connect them.
For E-commerce (Straightforward)
If you sell online, this is relatively simple. Google Analytics 4 can track revenue by source:
- Google Ads: £4,200 revenue from £800 ad spend = 5.25x ROAS ✅
- Facebook Ads: £1,800 revenue from £600 ad spend = 3x ROAS ✅
- Email: £2,400 revenue from £50 platform cost = 48x ROAS ✅
- Organic search: £3,600 revenue from £500 SEO investment = 7.2x ROAS ✅
For a more detailed breakdown of ad spend returns, read our ROAS guide.
For Lead Generation (Requires More Work)
If your business generates leads rather than online sales, you need one extra step: tracking what happens to leads after they enquire.
The simple version:
- Count leads by source (Google Ads: 15, SEO: 22, Facebook: 8, referral: 12)
- Track how many converted to customers (Google Ads: 4, SEO: 6, Facebook: 1, referral: 5)
- Calculate average customer value
- Multiply: conversions × average customer value = revenue from that channel
Example: Google Ads generated 15 leads, 4 became customers worth £3,000 each = £12,000 revenue. Ad spend was £1,200. ROI = 900%.
You don’t need a CRM to do this — a spreadsheet works fine for most small businesses. But if you want to get serious, a simple CRM (HubSpot free, Pipedrive, or even a well-structured Google Sheet) makes tracking leads to revenue much easier.
Step 4: Calculate ROI by Channel
Now you can see what’s actually working:
| Channel | Monthly Spend | Revenue Generated | ROI |
|---|---|---|---|
| Google Ads | £1,200 | £12,000 | 900% |
| SEO | £500 | £7,200 | 1,340% |
| Facebook Ads | £600 | £2,400 | 300% |
| £50 | £4,800 | 9,500% | |
| Networking | £200 | £6,000 | 2,900% |
This table changes everything. Instead of guessing, you can see exactly where your money works hardest. In this example, email marketing is returning £96 for every £1 spent. If you’re not investing in email, you’re missing your biggest opportunity.
What “Good” ROI Looks Like
There’s no universal answer, but here are some benchmarks:
- E-commerce ROAS: 4:1 or higher is good (£4 revenue per £1 ad spend)
- B2B lead gen: 5:1 or higher is good (factor in customer lifetime value, not just first purchase)
- Email marketing: 36:1 is the industry average (yes, really — email is absurdly effective)
- SEO: Hard to measure in the short term, but after 12+ months, should deliver the lowest cost per lead of any channel
Important: ROI should be measured over appropriate timeframes. PPC can show ROI within weeks. SEO might take 6-12 months. Content marketing might take even longer. Don’t judge a long-term strategy by short-term metrics.
Common ROI Measurement Mistakes
Mistake 1: Measuring Vanity Metrics
Likes, followers, impressions, and website visits are not ROI. They’re activity metrics. They might indicate something is working, but they don’t tell you whether marketing is generating revenue. Always bring the measurement back to leads, customers, and revenue.
Mistake 2: Ignoring Customer Lifetime Value
If your average customer stays for 3 years and spends £1,000/year, their lifetime value is £3,000. Spending £500 to acquire that customer isn’t a poor ROI — it’s a brilliant investment. Too many businesses measure ROI based on the first transaction only.
Mistake 3: Attributing Everything to the Last Click
A customer might see your Facebook ad, read your blog, get your email, and then Google your name and click a Google Ad before converting. Last-click attribution would give all the credit to Google Ads. Reality: every touchpoint played a role. Read our piece on marketing attribution for more on this.
Mistake 4: Not Measuring At All
The biggest mistake. If you’re spending money on marketing and you’re not measuring the return, you are guaranteed to be wasting some of it. Even rough measurements are better than none.
A Simple Monthly ROI Review (30 Minutes)
Here’s a practical routine you can do on the first Monday of every month:
- Pull your total marketing spend from accounting/bank statements (10 minutes)
- Check conversions by channel in Google Analytics + ad platforms (10 minutes)
- Count leads that became customers from your CRM or spreadsheet (5 minutes)
- Calculate ROI by channel using the formula above (5 minutes)
- Make one decision: Increase spend on what’s working, reduce spend on what isn’t
30 minutes. Once a month. That’s all it takes to stop guessing and start measuring. For more on building this into a routine, see our reporting guide for SMEs.
Want Help Measuring Your Marketing ROI?
At Black Sheep Marketing, we build reporting systems that show you exactly what your marketing returns — automatically, every week, in plain English.
No spreadsheets. No guesswork. No data science degree required.
If you’re spending money on marketing and you’re not sure what’s coming back, let’s fix that.
