Return on Investment (ROI)

Return on Investment (ROI) measures the profitability of a marketing campaign by comparing the cost of investment with the revenue generated. ROI in marketing helps organizations make data-driven decisions and allocate resources effectively. ROI is a key success indicator, allowing marketers and business leaders to compare strategies, optimize spending, and demonstrate the tangible value of their efforts. Strategies that require ROI assessment include SEO, paid ads, and influencer marketing. What Does ROI Stand For? The ROI acronym stands for Return on Investment. It represents the percentage or ratio of profit earned from an investment compared to its cost. How to Calculate Marketing ROI? Marketing ROI is calculated using the formula: ROI = (Revenue from Campaign − Cost of Campaign) ÷ Cost of Campaign × 100. For example, if a campaign generates $10,000 in revenue and costs $2,000, the ROI is 400%. What is a Good ROI? A good ROI is a high ROI. Higher marketing ROI indicate more efficient use of resources, but qualitative factors like brand awareness or customer lifetime value can also influence whether an ROI is considered successful.