Start with the simple formula

Marketing ROI is the return minus the cost, divided by the cost. If you spend £5,000 and earn £12,000 in gross profit from it, the return is £7,000 on a £5,000 cost, or 140 per cent. The formula is easy. The difficulty is deciding what honestly belongs in each part, which is where most mistakes happen.

Count all the costs

Include everything that went into the result: media spend, agency or freelancer fees, software, creative production, photography and the time your own team spent. Leaving costs out makes results look better than they are. It is also worth tracking the cost of one-off set-up separately, so you can see whether a campaign pays back over time rather than in its first month.

Measure profit, not just revenue

A campaign that brings in sales at a thin margin may not be worth running. Where you can, compare results against gross profit rather than turnover. For businesses with repeat customers, look at lifetime value too, but be conservative: only count repeat purchases you have evidence for, not those you hope for.

Be careful with attribution

Platforms often claim credit for the same sale. A customer might see a social ad, search your name, click a paid result and then buy, and three dashboards may each record a win. Check reported results against your CRM, invoices or payment records. Set up goals and events properly in Google Analytics, and remember it cannot see journeys such as phone calls, word of mouth or conversations in a meeting. Ask new customers how they heard about you, and record the answer.

Separate lead volume from lead quality

Cost per lead looks good when you attract anyone who fills in a form. What matters is cost per qualified lead, and cost per customer. Review enquiries with your sales team each month and mark which were relevant. Our guide to improving B2B enquiry quality explains how to tighten the offer and the form so that measurement reflects reality.

Allow for time lag

Some channels pay back quickly, others slowly. Search optimisation and content, for example, typically build over months, as covered in how long SEO takes to work. Judging them after four weeks leads to poor decisions. Decide the payback period you can accept for each channel before you start, and review against that, not against hopes.

A simple reporting routine

• Choose one reporting period and keep it consistent

• Record cost and revenue by channel in the same spreadsheet each month

• Note changes that could skew results, such as price rises or seasonality

• Review lead quality with sales, not only lead numbers

• Compare platform figures with real sales records

For organic search, Google Search Console gives a reliable view of impressions and clicks that you can compare with enquiries. Our article on SEO reporting metrics that matter goes into more detail.