Growth Formulae: Maximizing ROI on Paid Marketing Channels

Aakash Raman • Last Modified: August 10th, 2022

Marketers today have immense opportunities and possibilities to advertise their products adequately. They can leverage a diverse set of intuitive channels to market their products and reach the right audience effectively. This can lead to some complexity because Marketers will not know which Paid Marketing Channels will work best to achieve their business goals. Hence, leveraging the right mix of Paid Marketing Channels is of paramount importance to ensure a smooth return on investment and boost profitability.

Maximizing ROI is not as simple as it sounds. It requires marketers to chalk out an effective plan, strategically leverage resources, and determine the right set of KPIs they must track. This allows marketers to utilize their channels to the fullest potential and avoid any external noise. The wide range of Paid Marketing Channels for B2B (Business to Business) and B2C (Business to Consumer) companies continues to grow year after year. According to Valve&Meter, in 2019 the most popular Paid Marketing Channels for B2B companies include Content Marketing, Field Marketing, Email Marketing, etc. B2C companies can utilize Marketing Channels like Mobile Marketing, Email Marketing, Paid Search Marketing, SEO (Search Engine Optimization), and Social Media Marketing.

In this article, you will get an in-depth understanding of how to maximize your ROI across Paid Marketing Channels. This article will also explain ways to optimize Channel Mix for Revenue and ROI. This article also explains the challenges in analyzing Performance Data. Finally, this article wraps up with an intuitively chalked-out Marketing Blueprint that can help you refine your tactics and boost your Marketing performance. Excited to learn more about this topic in detail? Before we get into the details, watch this video to get a gist of our detailed course on Maximizing ROI on Paid Marketing Channels.

P.S. This course is a part of our Marketing Analytics Masterclass curated by Global Marketing Leaders. Click here to register for this Masterclass and upgrade your Marketing skills to maximize your Marketing ROI across numerous Paid Marketing Channels.

Table of Contents

Why Optimize Channel Mix for Revenue and ROI?

Marketers often need to analyze their Paid Marketing Channels to understand their campaign performance. However, identifying a particular channel/s that helps bring in maximum revenue and profit is easier said than done. Hence, it’s essential for marketers to carefully experiment and leverage unique channel combinations to gain qualified leads while keeping their Marketing budget in check.

Each Paid Marketing Channel has a different “Awareness Level” when it comes to gaining valuable customer insights and maximizing ROI. The Awareness Level is an intuitive and effective metric that helps keep track of and measure the efficiency of each Marketing Channel. In order to determine a Marketing Channel’s efficiency, they must be optimized.

The following 4 stages help maximize Marketing efficiency and ROI:

1) Finding the Prospect

Companies must find their prospects/potential leads to determine the quality and success of their brands. Each prospect’s intent can be determined with ease by analyzing their searches across different engines such as Google. Prospects having a high intent can potentially turn out to be a revenue-generating lead for the organization. This stage is also known as Top of Funnel (TOFU) Marketing.

2) Attracting the Prospect

In this stage, companies must find ways to prove that they can solve the challenges being faced by the prospects and meet their business requirements. In order to attract prospects, companies need to showcase their experience. They can do this by preparing Case Studies or Testimonials that they conducted for past customers. They can also display any Social Proofs they have. By leveraging customer-centric and targeted marketing initiatives & strategies, organizations can generate trust in their customer’s mind for their products & solutions. This stage is also known as Top of Funnel (TOFU) Marketing and Middle of Funnel (MOFU) Marketing.

3) Converting the Prospect to a Customer

The easiest way to convert any prospect into a customer is by making them purchase the most manageable products/service the company can provide. This way, you can keep track of and analyse their interactions with your products, helping you gain actionable insights about your customers. This stage is also known as Bottom of Funnel (BOFU) Marketing.

4) Growing the Lifetime Value of your Customer with your Company

Once you have converted your prospects into customers, the next step is to grow their Lifetime Value in your company. One approach to do this is to sell with continuity wherever possible. This helps ensure that your customers are on track with the changes associated with the products/services you offer. Implementing an Account-Based Marketing approach also helps to grow their Lifetime Value and enhance the LTV (Lifetime Value) of Customers. Like the previous stage, this stage is also known as Bottom of Funnel (BOFU) Marketing.

The Paradigm Shift in Measuring Marketing KPIs

KPIs play an important role in measuring the performance of companies over a period of time. KPIs are replaced every now and then and with ubiquitous KPIs available, companies must decide which ones align with their business goals. In the past, companies used all the KPIs they knew to measure progress, but with trial and errors companies learnt that not all KPIs satisfied their business goals. Hence, it is important to understand the important KPIs that are popular today.

Now let’s focus on these 7 essential Marketing KPIs that Marketers should always measure on their Paid Marketing Channels:

1) Lifetime Value of a Customer (LTV)

The Lifetime Value of a Customer (LTV) represents the cost that each customer has to the organization. It helps gain holistic insights into the worth of each customer for your organization. It is an essential KPI as it helps determine the company’s ROI, and plan the company’s future goals and strategies. The Lifetime Value of a Customer (LTV) is determined by multiplying revenue that the company generates, the gross margin, and the average of any repeated purchases the customer makes.

LTV Formula

2) Cost per Sale (CPS)

Cost per Sale, also known as Cost per Conversion, represents the amount an advertiser pays when he/she is able to make a sale because of an advertisement. When Marketers combine their overhead costs, along with their Marketing budget and vendor expenses, they get the CPS. You can calculate the Cost per Sale by adding the Marketing budget, advertising and overhead costs and then dividing this amount by the number of sales achieved.

CPS Formula for Paid Marketing Channels

3) Cost per Lead (CPL)

Cost Per Lead (CPL) is a Marketing pricing model where advertisers pay a fixed price for every lead they identify. CPL is commonly used by E-Commerce companies selling high value products. Cost per Lead (CPL) can be calculated by dividing the total money spent on advertisements by the number of times a lead was generated.

CPL Formula

4) Return on Ad Spend (ROAS)

Return on Ad Spend is a metric that helps measure the revenue your business generates for each dollar it invests.  ROAS helps marketers gain holistic insights about their campaign performance and helps them identify ad channels they must spend more time, resources and efforts on. ROAS is calculated by dividing the revenue generated from the marketing campaign by the cost of the marketing campaign.

ROAS Formula

5) MQL Last 30 Days

An MQL is a lead that is more likely to become a customer as compared to the other leads. These leads are highly or deeply engaged with your offerings/products but haven’t converted into a fully-fledged customer yet. The MQL generated every 30 days on your Paid Marketing Channels plays an important role because it helps to judge the quality of each lead generated. If you are receiving hundreds of leads every week, but none of them can afford your services, then they are not qualified leads.

6) Sales Last 30 Days

Analysing your Sales trends and patterns for the past 30 days on your Paid Marketing Channels plays a pivotal role in determining your Sales volume. Just as keeping track of the MQL over 30 days is crucial, analyzing Sales over the last 30 days is also essential. By doing so, you will get a timelier grasp on your Sales success and lead pipeline performance.

7) Time to Sales (TTS)

Time to Sales (TTS), is by far one of the most underrated, yet extremely important metrics to measure on many Paid Marketing Channels. It is defined as the total time it takes for a potential customer to become a lead. Some organizations are able to convince and convert a potential customer into a lead in just a few touchpoints, whereas others might struggle at this and require more efforts.

The Time to Sales (TTS) can be measured by using some CRMs (Customer Relationship Models) or by running a VLOOKUP in Excel, that measures the time between a lead being logged into your system to when a purchase is made.

Challenges in Analyzing Performance Data

With Marketer’s managing multiple unique Paid Marketing Channels, campaigns and initiatives in tandem, setting up effective Digital Marketing strategies can be challenging. In most cases, each campaign and channel operate in a completely different way and often don’t share a common goal. This results in marketers often keeping track of non-cooperating & conflicting KPIs. Hence, it is important to understand the challenges in analyzing these campaigns and Paid Marketing Channels to reduce the complexities associated with them. The challenges in analyzing Performance Data are:

1) Proper Attribution

Proper Attribution is the process of identifying the lead source of your data from any Paid Marketing Channel. In most cases, when Marketers analyze Performance Data they fail to attribute the lead source. This can be tackled by leveraging the native UTM attributes provided by Google’s Marketing platform.

2) Data Silos & Data Integration

A Data Silo represents a repository of data that can be accessed only by one department of an organization but not by others. One of the main issues with Data Silos on Paid Marketing Channels is the lack of transparency, efficiency, and trust that it brings to an organization. This further reduces the number of insights that can be gathered by the data and affects Data Integration.

3) Data Accuracy in Paid Marketing Channels

Data Accuracy refers to the quality of statistical inference Marketers can make when they analyze data from multiple Paid Marketing Channels. Hence, it is important to have data from multiple sources and judge their Time To Sale (TTS)  as well.

4) Not Explaining the Emotional Story of Data

In most cases, customers use their emotions to decide whether to use your products/services. Data does not tell an emotional story because it cannot judge your customer’s behavioural patterns and predict whether they will use your products/services in the future. Using tools like Hotjar can help you understand your customer’s preferences when using your products/services.

5) Long Gestations

Gestation refers to the time that data takes to become complete. Long gestation periods on your Paid Marketing Channels reduce efficiency in gaining insights from the customers. By choosing a Top or Bottom Funnel, you can optimize your Marketing processes to minimize the gestation period. 

The Marketing Performance Blueprint

The Marketing Performance Blueprint provides you an outline of some of the critical factors that you must take into account to ensure a successful revenue inflow from your Paid Marketing Channels.These can be impeccably beneficial if your business/organization is a B2B or B2C company.

In case you are a B2B company, the first step would be to identify your targets/prospects. You can use platforms such as Seamless.AI,, and Linkedin Sales to achieve this. The next step is to chalk out Inbound Strategies to convert your targets into customers. Some Inbound strategies for B2B companies include Content Marketing, Google Search ads, Webinars, SEO, etc. Once Inbound strategies are taken care of, the next step is to take care of the Outbound strategies. Some Outbound strategies for B2B companies include Cold Emails, Value-Added Emails, and Webinars.

Similar to B2B companies, if you are a B2C company, the first step would be to identify your targets/prospects. Here, it can be relatively challenging to identify your targets as they might not have a specific JD. Most of your targets might be on Social Media platforms like Reddit and Facebook. The next step would be to define an Inbound strategy. Some Inbound strategies for B2C companies include Content Marketing, SEO, and contests. Once Inbound strategies are taken care of, the next step is to take care of the Outbound strategies. Some Outbound strategies for B2C companies include Paid Ads on different Social Media Platforms like Facebook, Instagram, Youtube, etc, and Reviews.


Paid Marketing Channels play an important role in helping Marketers gain valuable & actionable insights from their customers. In order to maximize ROI from these Paid Marketing Channels and campaigns, you need to carefully and efficiently determine the right set of channels and refine & chalk out your strategies for them. By monitoring the right set of KPIs and addressing the challenges when analyzing Performance Data, you can meet your customer’s business requirements seamlessly and set both short and long-term goals strategically.

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