Return on Investment (ROI), by definition, is the measurement of profit you earn from each investment.
To have a clear understanding of ROI, one must first know the formula for calculations:
(Return – Investment)
ROI is expressed as a percentage by multiplying your result by 100.
Whether it is in terms of capital, equipment, or training, your ROI is very important when it comes to determining whether your marketing andadvertising campaigns are successful. It enables you to place your resources properly, and distribute your budget in areas that will earn you the most profit.
ROI calculations are different for each company and can become very complex depending on the number of variables you have on both the investment and profit side. However, understanding the formula is essential if you wish to produce the best results for your investments.
Some of the variables you may use as returns are:
Total revenue – total receipts for a campaign.
Gross profit – revenue minus the cost of goods.
Net profit – gross profit minus expenses.
Variables you might consider on the investment side are:
- Cost of sales
- Creative costs
- Printing costs
- Expenses for technology
- Management time
To make use of an ROI Calculator, download them here.
Focus on your ROI and it will help you justify your marketing expenditures, in good and difficult times. Remember, marketing is an investment to help produce revenues and move your organization forward in to the future.
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About IGM Creative Group
IGM Creative Group provides advertising solutions, marketing strategy and web development for Fortune 500, mid-market and small businesses.
166 Main Street, Suite 202, Lincoln Park, NJ, 07035.
Contact by phone at 973-709-1126
Send an email to firstname.lastname@example.org