August is a quiet month; school has not yet returned, fourth-quarter planning has not started up, and for the first time since spring, most business owners in Central Oregon have a moment when they can take a minute, look up, and ask themselves what good all that marketing money actually did. This is the month of head scratching. It is the time many business leaders begin pondering what their marketing spend actually bought them.

There’s a figure that ought to concern you more than it currently does. Around 28 percent of businesses actually have a genuine system in place for measuring the return on their marketing. The remaining 72 percent are simply spending money and hoping for the best. The Small Business Administration recommends that a sound company should reinvest between 7 and 8 percent of its revenue in marketing. For a business with a revenue of $600,000, that means more than $40,000 a year is being spent without any way of assessing whether it’s effective. You wouldn’t manage payroll that way, yet somehow this is the case with marketing.

A dollar spent on marketing should secure for you one of three outcomes: a lead, a measurable step toward a sale, or a lasting asset that you can point to later. If the dollar obtains none of these three, then it hasn’t bought you marketing; it simply generated activity. You only need to track three figures: the amount spent, the amount that came back, and the source from which it came.

It’s useful to understand the ceiling. When carried out effectively, email marketing brings a return of about 36 dollars for every dollar invested. Strong SEO eventually achieves a return of near 22 to 1. Even paid search, which is the most costly form of expenditure for most businesses, usually yields about 2 dollars for every dollar spent. These are the best-case industry figures, not guarantees, and they vary greatly depending on the industry and on the quality of the work carried out. Nevertheless, take that range into account. The difference between a dollar that returns 36 and a dollar that returns nothing is not due to chance; it comes down to whether anyone is measuring the results and whether anyone adjusts their approach when the results are underperforming.

Whenever a client asks me to examine their spending, I divide each dollar into one of three categories. The first category is a lead, which is a real person who raised their hand. The second is a tangible step that led to a lead: a telephone call, filling in a form, making a booking, signing up for an email, or any other action that can be counted. The third category comprises durable assets: a blog post that continues to rank for years, a review that secures the next ten customers, or a page on your website that addresses those late-night questions. Each healthy dollar carries out one of those three functions. The money that fails to perform any of these three roles ends up not serving your business.

If you find this uncomfortable, it’s not a sign that you’re incompetent in the field of marketing. It’s just that the reports you’ve been given were never designed to answer the right questions. Metrics such as reach, impressions, follower numbers, and a neat graph that slopes upward to the right are all examples of activity being presented as accountability. And this is what most small businesses look at each month, nod their heads, and move on. Around 30% of senior marketers claim to be confident about measuring the return on investment of their marketing. But 64% base next year’s budget on that figure. So, people are guessing.

This year, two changes took place. Many of the tracking methods that had been operating in the background have been disrupted due to privacy changes, and search is also undergoing a transformation. Technology research and advisory firm Gartner predicts that about a quarter of traditional search traffic will vanish as customers start to ask AI for recommendations rather than scrolling through a page of results. The companies that will still know what is working next year aren’t those who have the most expensive dashboard; they are the ones who have a straightforward system that they actually keep up with, a system which doesn’t fail when a browser update breaks a tracking pixel.

Because of complexity, most tracking exercises stop by March, which is why we took the opposite approach. Our one-page Marketing ROI Worksheet includes only the elements that really matter and excludes everything else: the amount you spent on each channel, the number of leads generated by each channel, where those leads came from, your cost per lead, and the revenue that you can genuinely trace back. Just fill it out once a month. It only takes fifteen minutes, and by the third month you will be able to see the pattern that has been completely hidden throughout the year, enabling you to decide which dollars to reallocate before setting your fourth quarter budget.

August is your last quiet stretch before the fourth quarter hits. So before you renew another contract or sign off on one more month of the same, run your numbers through the worksheet and work through the five questions in our mid-year check-in. If a lot of your money keeps landing in that activity bucket, the problem probably is not that you are spending too much. It is that you cannot see what the money is doing. And that is the good kind of problem, because you can fix it.

You don’t need a larger budget. What you need is to understand how the budget you currently have is performing. You need to ask the right questions. For more information, check out this blog on the one thing you need to do before any marketing.

You can download the one-page Marketing ROI Worksheet, or you can book a Strategy Sprint discovery call, and we’ll accompany you as you review your spending and let you know which amounts to keep, which to cut, and which to grow before the fourth quarter.