Return on investment (ROI)
If a campaign generated £12,000 of revenue and cost £3400 to run the campaign, the ROI would be 253%. This means that for every £1 spent, not only did you get that back, but you also made £2.53.
Return on investment is a very common way of measuring marketing spend and its value.
ROI measures the financial investment you are getting versus the financial return that has been driven by this initial investment. Therefore, it carries more weight than the cost per response, as a response may not lead to a sale.
Every company will calculate ROI using figures that are relevant to the product or service they are selling and their position in the market. However, the basic formula for ROI is very straightforward.
You should use this calculation against all of your campaigns to see which ones are delivering the greatest return on investment. This is also important to help justify investing in marketing.
Introduction to Marketing: Fundamentals of Marketing
Introduction to Marketing: Fundamentals of Marketing
Reach your personal and professional goals
Unlock access to hundreds of expert online courses and degrees from top universities and educators to gain accredited qualifications and professional CV-building certificates.
Join over 18 million learners to launch, switch or build upon your career, all at your own pace, across a wide range of topic areas.
