ROI concept
What is ROI?
ROI, acronym for Return On Investment (Return on Investment in Spanish) is the economic value that has been obtained as a result of a marketing campaign. It is a data that is used especially when measuring the performance of all related activities within said campaign, since indicates the money caused and can be used to make a comparison with the inverted.
It is something that takes on great relevance in modern marketing, especially in the inbound or from attraction, since it is the clearest indicator of the profitability of any campaign that has been carried out. With it you can find out the value of the sales generated as a result of these advertising and commercial initiatives, as well as establish their effectiveness.
Its calculation, while mandatory, is essential, since it serves to assess how to proceed with future campaigns and influences decision-making when investing. Its influence is due to its ability to establish the profitability of any advertising movement. It is the clearest indicator of the success or failure of an advertising or commercial strategy.
In general, to find out the ROI they only exist to make a simple account. The investment made must be subtracted from the income obtained and, once a result has been obtained, it must be divided by the investment made. The final number indicates the value caused by each euro invested.
What is ROI for?
ROI has only one purpose for the company: measure the profitability of a marketing strategy that has been carried out during a specific period of time. As a result of its calculation, the company can assess whether it has been something simply profitable or if, on the contrary, the profit caused has not been enough to justify the investment made.
Its function does not go beyond that, even though its consequences are important. If a high ROI is obtained, it means that the campaign has worked well and that some of its items could be used again in the future. If you get a bass, you better change your mind.
ROI Examples
We are going to give an example with numbers to better see what ROI is. Let's imagine that in NeoAttack an aggressive marketing campaign is elaborated with which to look for clients that need the Web-page design. A total investment of 5,000 euros is made and, at the end of the campaign, the total income obtained is 40,000. Following the formula explained before, we have that the ROI is 7.
What does it mean? That each euro invested has been multiplied by 7 and that, therefore, the proposal has been more than profitable.
Learn more about ROI
To understand more about ROI, we invite you to read the articles that we leave in the following links. Through them you can enter more information of interest.
