ROI: Measuring Your Marketing Value
ROI (Return on Investment) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of several different investments.
In marketing, ROI answers the question: “For every dollar I spend, how much revenue do I get back?” Calculating ROI involves looking at the total cost of your marketing (ad spend, agency fees, content creation) against the profit generated. It is the ultimate metric for determining the success of any digital campaign.
Frequently Asked Questions
The basic formula is: (Revenue - Marketing Cost) / Marketing Cost. If you spent €100 and made €500 in revenue, your ROI is 400%.
Use profit when you can. If you use revenue, you can overstate ROI in low-margin businesses.
ROAS (Return on Ad Spend) is a more specific version of ROI that only looks at the revenue generated compared to the direct cost of the ads, excluding other overhead costs.
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