Apr 11, 2022
In General Discussions
ROI is a fundamental metric in marketing; in fact, for many, it is the most important metric, since it allows us to know if we have recovered the budget invested in a campaign. But although the basic formula for calculating ROI is very simple, the truth is that really knowing how to analyze ROI has many nuances. Let's see all the ins and outs of this metric. Discover the most important digital marketing metrics . The 130 that you should not lose sight of! Click here and download the most complete ebook. How to analyze the ROI and know the profitability of your investment What is ROI? If you were asked to choose between launching a display advertising campaign or investing that money in your social media presence, which option would you individual email list choose and why? Naturally, you would try to choose the one that would have the most benefits for your company, both in the short and long term. And one way to find out would be to calculate the ROI associated with each strategy . ROI ( return on investment ) is the return we get from an investment, expressed as a percentage. In other words, it tells us how many benefits we have obtained for each euro invested. ROI is used in all types of companies to quantitatively measure the benefits of an investment, as well as to compare different investments with each other. How to analyze the return on investment There are several different ways to calculate ROI, and some are better suited to certain types of businesses than others. To calculate the ROI of a marketing campaign , we can use any of these formulas: Formula 1: Net return on investment / Cost of investment x 100 Formula 2: (Final value of the investment - Initial value of the investment) / Cost of the investment x 100 As you can see, these formulas are very simple, but there are several complexities to take into account when calculating the ROI of a marketing campaign. For this reason, we may need to use a business accounting or marketing analysis expert to help us obtain an accurate figure. The reason for this is that to get the final ROI figure, we have to make different assumptions and adjustments, for example, the number of monthly sales that we would have obtained without that campaign. It is important that these calculations are accurate, because they are what allow us to evaluate the results, measure the impact of marketing campaigns and make more accurate predictions.