Given our focus on Marketing Performance Management and Measurement (MPM), we have a lot of conversations with our customers and prospects about Marketing ROI. However, though many of our customers are anticipating advice or information on the subject, they are often surprised when we spend a large part of the time explaining why this measurement method is actually not the best way to quantify the impact of Marketing on the business.

It’s not just us who think this, either. Statistics from studies by Fournaise underscore the imprudent reality of using an antiquated ROI approach to measure Marketing:

80% of CEOs admit they do not really trust or are very impressed by the work of Marketing
90% of Marketers are not trained in Marketing Performance and Marketing ROI
80% of Marketers struggle to demonstrate the business efficacy of Marketing

This research echoes the results of our annual MPM benchmark studies, an ongoing study since 2001. We’re here warn you: Trying to measure Marketing ROI is a trap!

Why Does It Pay to Be Skeptical Of ROI?

ROI stands for “Return on Investment,” and it’s an established equation:

return on investment = (gain from investment – cost of investment) / cost of investment

Seems easy enough, right? Not so fast – let’s break it down.

The first problem arises when you try to calculate the “cost of investment.” Why? Because often, Marketing doesn’t know the big picture. To get a true calculation of ROI, you’re going to have to approach the calculation from the full perspective.

For every Marketing investment, you will need to include all the costs, such as office space, personnel, benefits, Marketing technology, etc. If you’re not doing so, your ROI figure will be inflated.

Next, let’s take a look at “gain from investment.” When you invest in an event, is it to acquire new customers, retain existing customers, or grow the share of wallet? If so, which customers? How many? In what time frame? Will you be calculating the ROI of the event based on “number of qualified opportunities” for a sales cycle that may take months to complete? If you are, how will you account for the many other touches that may influence the result, such as your website or direct marketing efforts?

Even with the advances in attribution analysis, it is still almost impossible to calculate the genuine gain from investment. As Marketers, even if we’re as meticulous as possible and employ integrated marketing, we cannot possibly track the individual contribution made by each tactic and every external factor.

So then why do Marketers still feel compelled to report on ROI?

Simple: Because Marketing hasn’t educated its leadership team on more meaningful business metrics, such as customer lifetime value and brand preference. But it’s time to change that.

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Getting Out of the ROI Trap

Avoid Marketing ROI trap, customers — Avoid falling into the Marketing ROI trap!

We advise our customers to avoid the ROI trap altogether and instead focus on measuring value, impact, and contribution. There are many metrics and financial numbers you can report on that aren’t ROI.

On the financial front, you can, for example, choose to replace an activity or tactic with one that is lower in cost and report on “financial savings.” But if that activity or tactic produces less value, then is this truly the right decision? Probably not. It would be better to consider a financial number such as “cost to acquire” or “cost to retain.”

Financial numbers alone, however, are not enough to make Marketing valuable in the eyes of the C-Suite. It takes Marketers who are “best in class” to have the ear of their leadership team. Those who succeed measure their performance against targets associated with Marketing’s contribution to business results. That means they are familiar with business outcomes and how success will be measured. Then, they find metrics that matter.

The outcomes and the metrics these best-in-class Marketers choose are incorporated into their Marketing plan to form the metrics chain that becomes the foundation for the Marketing dashboard.

Are you ready to reorient your approach and rise to the ranks of the best in class? If you want help with improving how you measure Marketing’s value, we’d love to hear from you.

FAQ:

(written by Penn of Sintra.ai)

Q1: Why do you say measuring “Marketing ROI” is a trap?
A: Because the classic ROI equation oversimplifies Marketing’s reality and often produces misleading confidence. In practice, it is extremely difficult to calculate true “cost of investment” and true “gain from investment” for Marketing—especially when multiple touches, long sales cycles, and external factors influence outcomes. The result is often an inflated or disputed number that does not earn credibility with the C-Suite.

Q2: What research signals that the traditional ROI approach is not working for Marketing?
A: The draft cites findings that highlight a trust and capability gap: many CEOs do not trust or are not impressed by Marketing’s work, many marketers lack training in performance/ROI, and many struggle to demonstrate business efficacy. This aligns with the broader theme from MPM benchmark work: the issue is not activity—it is proving contribution, impact, and value in business terms.

Q3: What is the standard ROI formula—and why is it problematic for Marketing?
A: ROI is typically defined as:

RO I = Cost of investment Gain from investment - Cost of investment

It becomes problematic because both the numerator and denominator are difficult to define accurately for Marketing without making assumptions that materially distort the result.

Q4: Why is “cost of investment” hard to calculate correctly for Marketing?
A: Because Marketing often does not include the full cost picture. A true ROI calculation must incorporate all relevant costs—people, benefits, office space, technology, overhead, and supporting resources. If these are omitted, the ROI number is artificially inflated and will not withstand Finance scrutiny.

Q5: Why is “gain from investment” even harder to calculate?
A: Because Marketing outcomes are rarely attributable to a single activity. For example, an event might be intended to acquire, retain, or grow customers—but results may occur over months and be influenced by many other touches (website, direct outreach, content, sales follow-up, partner activity, market conditions). Even with attribution advances, isolating the “genuine gain” from one tactic is often unrealistic.

Q6: If ROI is so flawed, why do marketers keep reporting it?
A: Because Marketing has not consistently educated leadership on more meaningful, decision-grade metrics that reflect how Marketing creates enterprise value—such as customer lifetime value and brand preference—so ROI becomes the default proxy for accountability.

Q7: What should Marketing measure instead of ROI?
A: Measure value, impact, and contribution using metrics that connect Marketing to business outcomes. Financial numbers can still be used, but not as a simplistic ROI claim. More decision-useful financial metrics often include:

Cost to acquire
Cost to retain
(When relevant) cost efficiency comparisons, provided value is not sacrificed

Q8: Why are financial metrics alone insufficient to prove Marketing’s value?
A: Because the C-Suite evaluates Marketing on its contribution to business results, not just cost efficiency. Best-in-class marketers earn credibility by measuring performance against outcome-based targets and by demonstrating how Marketing moves business needles—not merely how cheaply Marketing can operate.

Q9: How do best-in-class marketers operationalize “value, impact, and contribution”?
A: They start with business outcomes and define how success will be measured. Then they select metrics that matter and build a metrics chain that links activities and operational measures to outputs and, ultimately, to outcomes. Those outcomes and metrics are embedded in the Marketing plan and become the foundation for the Marketing dashboard.