What is ROI and how to calculate it in your marketing actions
Posted: Tue Dec 03, 2024 10:50 am
There are several ways to invest in marketing. But do you know how to check if this investment is delivering the expected results for your company? To do so, it is important to know what ROI is and how to calculate it in your marketing actions.
You can find this and other information relevant to the subject by checking out this article and the following topics.
What is Return on Investment?
How to calculate ROI in your company
Importance of ROI for Marketing
What is Return on Investment?
ROI stands for Return On Investment. It is a very important metric when audit directors auditors email lists you want to identify whether the marketing investment made by your company is worth it.
This is possible because ROI consists of a calculation to check how much financial return there was with advertising actions. Or even to check that a campaign had no return or even caused losses.
With ROI, you can also identify the return on investment in new tools and training. This way, you obtain data-based results and are not dependent on guesswork, which does not effectively help you understand the return on an investment.
How to calculate ROI in your company
Since ROI is a calculation, you need to use its formula to arrive at the return on investment of a marketing action or an entire strategy. For the second case, simply subtract the marketing costs from the total revenue and divide the result by the costs.
See the ROI formula below:
ROI = Revenue – Cost / Cost.
To understand better, check out the following example:
If a company's total revenue was 100 thousand reais and the investment in marketing was 10 thousand, with the ROI formula it is possible to make the following calculation:
ROI = (100,000 – 10,000) / 10,000
ROI = 9
The result shows that the Return on Investment was 9 times the investment made. To obtain the result in percentage, simply do the same calculation and multiply the result by 100. In the example above, 900% return.
To calculate the result of a specific action, it is necessary to identify how much of the total revenue came from that action and use it in the same formula together with its individual cost.
Importance of ROI for Marketing
This metric is a great ally when it comes to creating an assertive marketing plan that has a real chance of achieving the objectives set. After all, it allows you to identify the actions that are achieving results and those that are not.
Therefore, it is recommended to continue investing in actions that offer the expected results and eliminate campaigns that do not show the expected return. In other words, this is a very simple way to improve your marketing strategy.
Another advantage of calculating ROI is that it can be shown to investors interested in your business. This indicator is very important for them when choosing where to invest. It also helps the company identify how long marketing actions take to show results.
You can find this and other information relevant to the subject by checking out this article and the following topics.
What is Return on Investment?
How to calculate ROI in your company
Importance of ROI for Marketing
What is Return on Investment?
ROI stands for Return On Investment. It is a very important metric when audit directors auditors email lists you want to identify whether the marketing investment made by your company is worth it.
This is possible because ROI consists of a calculation to check how much financial return there was with advertising actions. Or even to check that a campaign had no return or even caused losses.
With ROI, you can also identify the return on investment in new tools and training. This way, you obtain data-based results and are not dependent on guesswork, which does not effectively help you understand the return on an investment.
How to calculate ROI in your company
Since ROI is a calculation, you need to use its formula to arrive at the return on investment of a marketing action or an entire strategy. For the second case, simply subtract the marketing costs from the total revenue and divide the result by the costs.
See the ROI formula below:
ROI = Revenue – Cost / Cost.
To understand better, check out the following example:
If a company's total revenue was 100 thousand reais and the investment in marketing was 10 thousand, with the ROI formula it is possible to make the following calculation:
ROI = (100,000 – 10,000) / 10,000
ROI = 9
The result shows that the Return on Investment was 9 times the investment made. To obtain the result in percentage, simply do the same calculation and multiply the result by 100. In the example above, 900% return.
To calculate the result of a specific action, it is necessary to identify how much of the total revenue came from that action and use it in the same formula together with its individual cost.
Importance of ROI for Marketing
This metric is a great ally when it comes to creating an assertive marketing plan that has a real chance of achieving the objectives set. After all, it allows you to identify the actions that are achieving results and those that are not.
Therefore, it is recommended to continue investing in actions that offer the expected results and eliminate campaigns that do not show the expected return. In other words, this is a very simple way to improve your marketing strategy.
Another advantage of calculating ROI is that it can be shown to investors interested in your business. This indicator is very important for them when choosing where to invest. It also helps the company identify how long marketing actions take to show results.