What is ROI in marketing? How can I calculate it?

[jisansorkar12]

ROI (Return on Investment) is the economic value that you generate as a result of your marketing actions. It is a formula that helps you calculate the profitability of your campaigns, and is used to determine the results of an investment or investments made by your company.

Tracking your return on investment will help you understand whether the money you invested in a marketing campaign has generated financial gains or losses.

Calculating ROI is not an easy task, but it is necessary to measure the impact of your actions. Within your digital marketing plan you must include the analysis part to observe if the strategies you have carried out are being fulfilled and giving the expected results, or if on the contrary, it is necessary to make changes to improve.

Throughout this post we will tell you more about what ROI is and how to stockholder database calculate it correctly. We hope you are ready and can then successfully apply it to your business.

How to calculate ROI?
You probably already know this, but a very important point within the Inbound marketing methodology is to measure the results of your strategies, because what is not measured cannot be improved.

Calculating ROI is very useful for checking the profitability of your actions, because it is the relationship between the investment and the profits generated.

The return on investment formula is as follows:

ROI = (Profit – Investment) / Investment x 100

ROI is presented as a percentage, so it is multiplied by 100.

Imagine that you invest €500 to take a course, and from this you get €2,500 in profit, then your return on investment would be 400%. That is, for every euro you have invested, you have obtained a return on investment of €4 in profit.

You may end up with a negative return on investment, which means that you will have to make changes and review what is not working. However, keep in mind that you may end up with a negative ROI because your goal was to achieve a lot of impact and generate a lot of traffic to your website, that is, you have not generated economic profits, but you have achieved your goal. A campaign with a negative ROI can be positive within certain contexts.

For future decision making, it is important to calculate the ROI to know whether your investments will yield benefits or not. You will have more information to be able to evaluate whether your strategies are profitable.

How to calculate ROI in Marketing?
We know that doing calculations in a digital marketing campaign can be complex and very confusing. The formula is still the same as the one we presented above, but with the benefits and investments you have made in your marketing plan. Here it is a little more complicated because you have to take into account all your return (benefits) from each part of your marketing plan and what your investments have been.

Therefore, when talking about investment, we must take into account elements such as:

The staff you have in charge of each campaign and the hours they dedicate.
Technology. Cameras, plates, audiovisual production, costs on web platforms, etc.
Creativity costs

[yadaysrdone]

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