A Simple ROI Formula to Build a Business Case for Web Investment

Every marketer struggles with accountability. It keeps chief marketing officers up at night and makes it more difficult to fund new marketing initiatives. The key is the ability to demonstrate return on investment. We've developed a simple methodology to model web ROI using basic analytical tools.

The first step is the hardest, and requires that marketing teams actually communicate with sales and operations. It's placing a dollar value on the successful outcome of a web experience. For e-commerce sites, it's easy. What's the value of the sale? For recurring models, like wireless, ISPs or credit card holders, it's the average revenue per user (ARPU). For affiliate sales, like insurance or B-to-B industries (e.g., software vendors), the value may be considered the total cost of ownership over the length of the contract. Whatever metric works for your business is fine; the important part is assigning a measureable value to it.