You hear it over and over again: the most successful online marketers test everything and track everything. So why aren’t you? Tracking ROI isn’t just for affiliates who buy traffic. With a little ingenuity, you can actually track ROI for all types of marketing.

The first step, though, to is be sure you actualy undertand the formula for calculating ROI. Here’s the rough but simple one we use at Affiliate Classroom:

(Gross Affiliate Commissions – Expenses) / Expenses x 100

As you can see, you’re basically:

* Subtracting your expenses from your revenue. That gives you your net profits.

* Diving your net profits by your expenses and multiplying by 100 to turn it into a percentage (that’s what the “x 100″ is for).

Depending on the type of marketing you’re doing, here’s what some typical ROI calculation might look like:

PPC Campaign

($3750 Gross Commissions – $1400 Ad Spend = $ 2350 Net Profits

$ 2350/ $1400 x 100 = 167% ROI

Article Marketing Campaign

$1850 Gross Commissions – $625 Outsource Expense = $1225 Net Profits

$1225 / $625 x 100 = 196% ROI

Email Marketing Campaign

$4875 Gross Commissions – $2150 Campaign Costs = $2725 Net Profits

$2725 / $2150 = 126% ROI

Of course, to calculate ROI you need data – specifically data on your expenses and your conversions. Tracking expenses is relatively simple with PPC, since it’s easy enough to see exactly how much you are spending on ads for every campaign.

But for article marketing, email marketing, and other forms of online marketing (such as blog or forum marketing), it’s vital that you develop a way to measure the cost of intangibles, such as the time you spend writing articles or managing JVs. (Read our article on “Do You Know How Much Your Articles Are Worth?” for ideas on how to track the return on your article marketing.)

To track conversions, the ideal secanrio is to work with merchants who support conversion tracking. These merchants will set up your AdWords or other conversion tracking code on the “thank you” page, making it ultra simple for you.

But realistically, many merchants still don’t support conversion tracking, so you’ll need to use a third party tracking tool. Hypertracker is inexpensive and easy to set up, and if you take advantage of all of its features, it can actually calculate your return on each campaign.

Over and over again, we see affiliates starting new campaigns in new niches without trying to improve the conversions on their existing sites. Yet it’s not that difficult to achieve significant growth in sales, IF you know which links, ads, and campaigns result in the most sales. It usually takes less time to take those under-performing campaigns and remodel them after your winners.

So if you need motivation, simply ask yourself whether you’d like to sell twice as much as you do right now with a minimal amount of additional effort. In most cases it’s much easier to optimize an existing campaign — by tweaking your landing pages, headlines, ad copy, titles, and resource boxes — than to start and test a new campaign from scratch.

Next in this series… update those “aging” sites!

Other posts in this series:

Q4 Affiliate Marketing Checklist

6 Ways to Put Dormant Domains to Use

Which Offers to Keep, Which to Dump?