Portfolio-Level ROI
Portfolio-Level ROI measures the return of the entire marketing investment as a single asset class. It focuses on the holistic relationship between Total Marketing Spend and Total Business Revenue, ignoring channel-level attribution squabbles. It is the ultimate measure of marketing efficiency.
The Short Version
Did the business grow profitably, yes or no?
Missing the Forest for the Trees
You have 5 channels all claiming credit. The sum of their claimed revenue is higher than your actual revenue.
Maximizing individual channels often hurts the portfolio (e.g., cannibalization). Portfolio-Level ROI forces all channels to work together for the net outcome.
How it works
Total Incremental Revenue from All Sources / Total Marketing Cost
Adjust for fixed costs and overhead
Compare against other capital investments (e.g., Inventory, R&D)
Common Misconceptions
Summing channel ROIs to get Portfolio ROI (Mathematically wrong due to overlap)
Ignoring 'Halo Effects' between channels
Optimizing channels in silos
Related Terms
Frequently Asked Questions
QIs this MER?
It is similar to MER (Marketing Efficiency Ratio), but strictly uses 'Incremental Revenue' rather than total revenue, making it more accurate for decision making.
QHow do I improve Portfolio ROI?
By reallocating budget from low-marginal-return channels (saturated) to high-marginal-return opportunities (unsaturated).