What is year-over-year growth?

Year-over-year growth, often shortened to YOY growth, is a way to compare how well something is doing now compared to the exact same time last year. Imagine you want to know if your lemonade stand is selling more lemonade. Instead of comparing sales from June to May, which might be different just because of the weather, you compare June this year to June last year. This helps you understand if your business is truly growing over time, not just experiencing normal seasonal ups and downs.

For marketers, YOY growth is a powerful tool because it helps cut through the noise of seasonal changes. Many marketing efforts, like holiday campaigns or summer promotions, naturally see spikes at certain times of the year. By looking at YOY data, you can see if your strategies are making a real, lasting impact on your business's performance, giving you a clearer picture of success.

Why year-over-year growth matters for marketers

Understanding YOY growth is super important for several reasons. It helps marketing teams make smarter decisions and show the true value of their work. Here's why it's a key metric:

• It ignores seasonality: Many businesses have busy and slow seasons. YOY growth helps you compare apples to apples. If your website traffic always goes up in December because of holiday shopping, comparing December to November won't tell you much about your marketing's long-term success. Comparing December this year to December last year does.
• Shows real progress: It provides a clear, long-term view of whether your marketing strategies are actually moving the needle. Are your SEO efforts leading to more organic visitors this year than last year? Is your content generating more leads?
• Supports strategic planning: By seeing consistent growth (or decline), you can better plan future campaigns, allocate budgets, and adjust your overall marketing strategy. If a particular channel shows strong YOY growth, it might be worth investing more there.
• Helps set realistic goals: Knowing your historical YOY growth helps you set achievable targets for the coming year.

How to calculate year-over-year growth

The calculation for YOY growth is straightforward. You just need two numbers: the value for the current period and the value for the same period last year.

Formula:

((Current Period Value - Previous Year Same Period Value) / Previous Year Same Period Value) * 100

Let's say your website had 10,000 visitors in March this year and 8,000 visitors in March last year.

((10,000 - 8,000) / 8,000) * 100 = (2,000 / 8,000) * 100 = 0.25 * 100 = 25%

This means your website traffic grew by 25% year-over-year for March.

Applying year-over-year growth in marketing

YOY growth can be applied to almost any measurable marketing metric. Here are some common ways marketing teams use it:

Digital marketing and SEO

• Website traffic: Track organic, direct, referral, or paid traffic YOY to see if your SEO or advertising efforts are increasing visibility and drawing more visitors.
• Conversion rates: Is your website converting more visitors into customers this year compared to last year?
• Keyword rankings: Are your target keywords ranking higher and driving more traffic than they did a year ago?

Content marketing

• Blog post views: Are your content pieces getting more views this year? This could indicate better promotion or more engaging topics.
• Lead generation from content: Is the content you're producing generating more leads compared to the same time last year?

Paid advertising

• Return on ad spend (ROAS): Are your ad campaigns generating a better return on investment than they did last year for the same period?
• Cost per acquisition (CPA): Is it costing you less to acquire a new customer through ads this year?

Best practices for using YOY data

• Look at the big picture: Don't just focus on one metric. Look at YOY growth across several key performance indicators (KPIs) to get a complete understanding of your marketing's impact.
• Consider the context: Always ask why numbers might be up or down. Did you launch a major campaign? Did a competitor close down? Were there any significant market changes?
• Combine with other metrics: While YOY is great for long-term trends, also look at month-over-month or quarter-over-quarter data for shorter-term insights and quick adjustments.
• Use it for forecasting: Historical YOY growth can help you predict future performance and set ambitious but realistic goals.

By regularly reviewing year-over-year growth, marketing teams can gain valuable insights into their long-term performance, celebrate true successes, and quickly identify areas that need improvement. It's a foundational metric for strategic decision-making and continuous optimization of your marketing efforts.