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Return On Investment (ROI)

The Return on Investment (ROI), or Return on Investment, is a KPI used in marketing that shows the percentage linkage of the capital invested against the profits generated.

The term "return on investment" is derived from economics. In connection with online marketing, the ROI value is a link between the amount of commercial promotion used and the profit obtained through commercial promotion on the Internet. For businesses, ROI value, as opposed to click-through rate and page impressions, is an important tool in establishing the true economic success of Internet advertising campaigns.


The ROI value is calculated as follows: Suppose a company places banners for € 2,000 and generates sales of € 2,500. The profit would be 500 EUR. The return on investment is 0.25 percent for this case. Finally:
ROI = (costs of turnover) / costs

Relevance for online marketing and SEO

ROI provides a statistic for marketers and businesses that makes the effectiveness of various marketing actions financially measurable. In search engine optimization, an accurate determination of the ROI value is only conditionally feasible, since not all sales of a product can be clearly transposed into long-term SEO costs. The ROI value does not include the time factor in the calculation. It can be set whether the click paths can be traced from the organic search results, that is, the SERPs to the product page of the store or a purchase. Therefore, the cost of SEO can be established within a certain period of time in relation to the profit caused during this period.

In this way, the search engine optimization work is measurable. However, as many SEO measures do not have immediate effect, the allocation of sales to individual optimizations is difficult. Regardless, it is essential for the success of measuring specific marketing campaigns or complete packages of marketing campaigns. Since a fixed amount is typically calculated or spent, the customer journey can be used to understand how the conversion occurred. It is essential that advertisers and customers define precisely what the conversion is (for example, a purchase or a newsletter app) and which channels are included in the calculation.

ROI can also be used as a KPI for the evaluation of marketing actions and to determine objectives. This ratio provides a solid foundation for budget negotiations or bonus payments for both marketers and clients. Regardless, ROAS is generally used to establish the link between financial resources used exclusively for ad placement and generated sales.