ROI is a performance measurement used to determine the efficiency of an investment. For the most part a most marketing campaigns are deemed either a success or failure based on having a positive ROI. To calculate ROI, the return of an investment is divided by the cost of the investment.
ROI = ( (Earnings - Initial Invested Amount) / Inital Invested Amount ) × 100
A common instance where a marketer would have to calculate ROI would be in advertising. A marketer may have compare two different advertising campaings by dividing the gross profit that each campaign has generated by its respective marketing expenses. Which ever campaign has a higher ROI would usually get more marketing spend or budget.
Maximizing campaign ROI and profit from advertising is among every marketer's top priorities. Because of this, yield optimization — increasing the spread between the cost of advertising and the revenue derived from it — is a critical focus for digital marketers.Read Article »
This guide provides four insightful approaches to understanding customers and building more profitable marketing campaigns.Read guide »