Many Australian SMEs struggle to confidently predict the return on their marketing investment when planning budgets. It’s easy to get lost in vanity metrics – likes and shares – but true ROI focuses on revenue generated. We help businesses move beyond guesswork and towards data-driven forecasting. It’s not about crystal balls, it’s about sensible estimation based on past performance and realistic expectations.

The first step is understanding your current conversion funnel. How many leads does each marketing channel generate? What percentage of those leads become customers? And, crucially, what’s the average value of a customer? Knowing these numbers – even roughly – is fundamental. If you don’t have this data, prioritising tracking mechanisms should be your immediate focus.

Here are a few practical approaches to forecasting:

• Historical Analysis: Look at your marketing spend and revenue over the past 12-24 months. Calculate your ROI for each channel. This provides a baseline. Be cautious though – past performance isn’t always indicative of future results, especially with changing market conditions.
• Cost Per Acquisition (CPA) Modelling: Estimate how much it costs to acquire a new customer through each channel. Then, multiply that CPA by the number of new customers you aim to acquire. This gives you a projected marketing spend.
• Incremental Budgeting: Start with your current spend and add a percentage increase based on growth targets. For example, if you want to grow revenue by 10%, you might increase your marketing budget by a similar amount. Monitor closely and adjust as needed.
• Scenario Planning: Develop best-case, worst-case, and most-likely scenarios. This helps you prepare for different outcomes and allocate resources accordingly. Consider factors like competitor activity and seasonal trends.

Don’t forget to factor in attribution. Understanding which touchpoints contribute to a sale is vital. While complex attribution models exist, a simple ‘first touch’ or ‘last touch’ approach can be a good starting point. Increasingly, we’re seeing clients benefit from data-driven attribution tools that provide a more holistic view.

Forecasting marketing ROI isn’t an exact science, but it’s a crucial exercise for responsible budget allocation. By combining historical data, realistic estimations, and ongoing monitoring, you can significantly improve your chances of achieving a positive return and driving sustainable growth. The key takeaway is to start somewhere, track everything, and refine your approach over time. If you’re unsure where to begin, consider a marketing audit to assess your current performance and identify opportunities for improvement.