Understanding marketing Return on Investment (ROI) is crucial for Australian SMEs wanting to maximise growth. Too often, businesses only factor in direct costs – ad spend, agency fees, software subscriptions. However, to get a genuinely accurate picture of profitability, we need to include relevant overhead costs. Failing to do so can lead to inflated ROI figures and poor decision-making.

So, what overheads should you include? It’s about identifying costs that wouldn’t exist *without* your marketing efforts. Here are the key areas we advise our clients to consider:

• Marketing Team Time: This is often the biggest oversight. Include the portion of salaries dedicated to marketing activities – even if it’s just your business owner’s time spent on social media or content creation. Accurately tracking time spent is vital.
• Design & Creative Resources: If you use internal staff or freelancers for graphic design, copywriting, or video editing specifically for marketing campaigns, include those costs. Don’t forget software licenses for creative tools.
• Marketing Technology Stack: Beyond subscriptions for core platforms (CRM, email marketing), factor in costs for analytics tools, landing page builders, and any other technology directly supporting your marketing.
• Content Production Costs: This extends beyond design. Consider costs for photography, videography, stock images, and any external services used to create marketing content.

It’s important to be realistic. We don’t suggest allocating *all* office rent or electricity to marketing, even if the marketing team uses those resources. Focus on the incremental costs – the expenses that demonstrably increase because of your marketing activities. For example, if you hire a temporary staff member specifically to manage a large campaign, that’s a direct overhead cost.

Accurately calculating marketing ROI with these overheads included provides a clearer understanding of what’s truly working. This allows you to optimise campaigns, allocate budgets effectively, and ultimately, drive sustainable growth for your business. If you’re unsure where to start, a marketing audit can help identify all relevant costs and establish a robust ROI tracking system.

The next step is to review your current marketing spend and identify which overheads you haven’t been accounting for. Start tracking these costs now to get a more accurate view of your marketing performance.