How to Increase ROI in Marketing and Advertising

In July 2018 when The New York Times termed NBA side Toronto Raptors’s trade deal for Kawhi Leonard as the ‘biggest gamble in franchise history’, it probably left people worried and wondering about what (and more importantly how much) return the deal would generate.

Just 10 months later, Leonard went ahead and did this.

Goosebumps, right?

At the time the deal was struck, little did the team management know that Leonard would be pulling off one of the greatest sporting moments in history so soon after, and therefore providing the best possible return on investment (ROI) a team could ask for. 

(Side note for those who don’t know, the Raptors went on to win the NBA championship by beating two-time defending champions Golden State Warriors in the finals).

However, things could easily have taken a drastic turn had Leonard missed that shot. Strategies would be questioned, tactics would be scrutinized, and worst of all the dreaded wait for an ROI would have continued.

Marketing and advertising agencies go through the same turmoil whenever they have to make similar business decisions. Is this campaign the right one? Would that project lead to a positive ROI in marketing? How long before we get a return? Are there any other costs associated? 

The questions are endless. So is the anxiety.

But, in addition to incorporating some key factors, agencies must also keep reminding themselves about a few crucial aspects before answering those questions and embarking on the journey to estimate their marketing and advertising ROIs.

‘Tis an Investment, Not a Cost’

The word ‘cost’ has a negative ring to it, doesn’t it? It gives an impression that something is a liability instead of an asset, which should not be the case when agencies look at marketing and advertising expenses. When the Toronto Raptors brought Kawhi Leonard in, the management would surely not have wanted the word ‘liability’ to be associated with him.

Sir Martin Sorrell, founder of once the world’s most valuable advertising agency, WPP plc, would agree. He says, companies are wrong to consider marketing as a cost and should always view it as an investment. 

Apart from on the company financial statements, marketing and advertising must never be categorized as costs. Instead, these elements must be treated as investments, since they are implemented with an aim to contribute towards the growth of a company.

However, just like any other investment, the returns could be instant or they could be something agencies achieve in the long-term.

Returns Can Be Long-Term

And there you were thinking that only marriages work that way!

Going back to the NBA example, the Raptors could have been left frustrated had Leonard missed his last-ditch buzzer-beater. A project that took just 10 months to generate a positive ROI for the team, had the potential to stretch much longer. 

There’s no doubting the talent of the player or the due diligence ability of the team management to make a productive decision in this scenario. However, there can be circumstances that lead to delays in generating the desired ROI in marketing for agencies.

An example of a long-term return is evident in the case of search engine optimization (SEO) marketing — an organic method that helps agencies improve their market visibility. While it is understood that the organic nature of this method means the results will show sometime in the future, it’s not certain how long that wait could be.

Therefore, while answering questions related to the ROI time period, agencies must understand that returns can be a long-term affair and accordingly weigh the pros and cons of an investment.

ROI Isn’t Necessarily Monetary

One mistake that agencies often make while answering questions related to ROI in marketing, is to ask an irrelevant question. For example, “how much return would the investment generate?”

There can be instances when senior executives at agencies demand that the ROI have a number associated with it since higher the number, the better the ROI has become the globally accepted norm.

In reality, however, ROI in marketing and advertising depends largely on the goal that agencies set out to achieve at the beginning. Just because ROI can be represented with a numerical value that is calculated using financial data and metrics, it does not mean that it should be represented that way.

Depending on an agency’s goal, ROI in marketing can have different values for different objectives. 

For instance, taking a page out of Igor Ansoff’s book, if the goal is to sell a new product in a new market then the ROI for that project would be completely different when compared to selling an existing product in an existing market. Logic dictates that the revenue in both scenarios would be substantially different and therefore cannot (and should not) be a credible measure for ROI.

Companies would be willing to take a major hit on their income statements and generate a negative ROI, based on revenue, in return for establishing a solid foundation in a new market and getting a positive ROI based on the access to a number of new potential customers.

Similarly, if the goal of an agency is to increase its customer value by targeting an inflow of quality customers, who can help improve the customer journey process by advocating the business to other customers, then the marketing ROI goals must be tailored accordingly.

The 5Rs to Increase ROI

While there might not be a correct answer to the question ‘What is a good ROI for an agency, here’s the exciting part — the holy grail for agencies to get the maximum ROI in marketing and advertising does indeed exist.

  • Right Audience

Have you ever found yourself on a website viewing an advertisement for another website that you visited earlier? If yes, then you know that you’re now part of a chosen elite target market.

Choosing the right target market to showcase your campaigns is what it’s all about when it comes to increasing ROI in marketing and advertising. It is imperative that agencies master the combination of having the right set of eyes on the right product at the right time.

One of the best ways of doing so is taking the digital advertising route, which has the ability to target and segment the ideal audience for an agency. Through various processes like site retargeting, search retargeting, and geo-fencing agencies can enjoy a high return on investment and thereby give themselves an edge over their competitors.

  • Right Tactics

While there are proponents of both shots, what do you think is more valuable to score in basketball — a three-pointer or a two-pointer? 

Depends on the gravitas of the situation, right? 

If your team is playing an inconsequential league game with nothing to lose, it might as well shoot those three-pointers to enthrall the fans and make the best out of a grim situation. 

But, what if it’s a tied game in the final match of a conference semifinal with just seconds left to score and cement a place in history? Do you risk a three-pointer or play it safe and win with a two?

That’s where using the right tactics come into play. What the Toronto Raptors did perfectly to ensure that they got the best ROI from their trade deal for Kawhi Leonard was to execute the right tactics at the right time. They chose a two-pointer over a three-pointer and it paid off.

Similarly, for agencies to ensure that they get the maximum ROI in marketing from their campaigns, it’s important that they choose the right tactics and not necessarily the best ones.

While some might prefer direct marketing as a great tactic to get the best out of their promotional campaigns, email marketing, which has a proven record of generating an ROI of 3800%, is a very popular and efficient tactic, especially if the aim is to spend less and earn more.

  • Right Strategy

For agencies running campaigns and hoping to increase their ROI in marketing and advertising, choosing the right tactics go hand-in-hand with executing the right strategy. Not having the right strategy is like having access to the fastest car in a race and not knowing how to drive it to win.

The Toronto Raptors could have messed up their tactic of choosing to go for a two-pointer over a three-pointer in the dying seconds of the game if they did not have the right strategy in place.

What was that strategy, you ask? The strategy of having their leading points-per-game scoring player, Kawhi Leonard, on court (and not on the bench) when the team needed him the most.

The presence of having the right strategy, which complements the right tactics, leads agencies to enjoy a high return on investment. It was due to these techniques that a marketing agency was able to provide a 4,381% ROI to one of its clients — Cafe Mexicana.

  • Right Tools

Imagine this. You are about to dazzle an audience of sophisticated royals at the opera house. You know that the people there would enjoy the serenity of the soothing tunes from your violin. You have your tactics and strategy in place to get the best ROI — play the violin, earn the appreciation of the worldly-wise, and get called back next week for another performance.

You walk on to the stage, acknowledge the applause, keep the violin on your shoulder, and take a deep breath. Now is the time to get the dazzling started. You look at your violin case and suddenly the ground beneath your feet starts to move.

Your world turns upside down because you realize that you forgot to bring the bow.

Mastering the art of using the right tactics and strategy is great. However, if an agency does not have the right tools to execute those tactics and strategies, then it’s as bad as playing a violin without a bow. All you produce is noise for something that had the potential to attract people, but is instead now driving everyone away.

Getting your hands on the right set of tools to get the best ROI in marketing and advertising can be a challenge. However, agencies can boost their bottom lines and increase their returns substantially by using valuable marketing solutions catered to their needs and requirements.

  • Right Team

American author and speaker John C. Maxwell once said, Teamwork makes the dream work, but a vision becomes a nightmare when the leader has a big dream and a bad team. 

And rightfully so, it takes all the levers of a machine to work together to get it to operate productively and efficiently. If even one of them fails, the whole machine stops working.

Even though the Toronto Raptors put all their faith in Kawhi Leonard to get them over the finish line, they could not have done so without the others players and their contribution to the team.

Agencies too must realize the importance of having the right team in place to help increase their ROI in marketing and advertising. Every person brings a unique perspective to the table and it’s the value received from that collective lot that helps boost growth and revenue.

There might be instances though when it becomes a costly affair for agencies to have a large team or top-notch quality talent in place; however, with the help of valuable and cost-efficient marketing services solutions, agencies can save costs, increase profits, and ultimately get the best returns from their marketing and advertising campaigns.


Increasing ROI in marketing and advertising can be a huge task for agencies, especially when it comes to reducing costs. While the success mantra for start-ups is to be as lean as possible to reduce their costs, going lean beyond a limit can be very challenging for established agencies.

Therefore, incorporating the 5R philosophy, by utilizing valuable white-lable solutions, provides agencies with the best answers that they’re searching for, while sustaining themselves and getting the best possible return on their investments.

About the Author

Ankur is a former Content Marketing Specialist at Vendasta with years of experience in marketing communications and journalism. When he's not writing blogs and producing content, he can be found tweeting, playing the guitar, and watching sports.

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