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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.
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