Just as important as planning marketing budgets is discovering the return that such investments are bringing to the business.
Even today, many companies invest in marketing without knowing the positive or negative effects it has on the organization. If at one time guesswork was the most widely used parameter to measure marketing actions, today we have essential metrics to measure the efficiency of investments.
One of the best-known marketing indicators is ROI (return on investment). With it, you can find out which strategies are generating good results.
Although it is a well-known metric, the 2019 Content Marketing Trends survey revealed that 46.6% of companies do not measure ROI and are unable to assess the performance of their strategies. Meanwhile, 34.8% acknowledged that measuring ROI is a challenge for content marketing.
This highlights the importance of talking about Return on Investment and how to put it into practice! This is the purpose of the following content.
What is ROI in Marketing?
The acronym ROI comes from the telegram number list term “Return on Investment”. As the name suggests, this is an indicator used to determine how much the company has returned on its marketing investments.
This includes evaluating the amount spent on different channels, on actions or campaigns, on the acquisition of new tools and on training professionals.
The results that ROI delivers serve as a guide to knowing which investments are generating gains, which ones need to be optimized to deliver better performance and which ones should be discontinued.
What is the formula for calculating ROI?
To calculate ROI, it is important to have collaboration and unified communication (including ip telephony) anywhere information. First, to survey the total revenue in a given period. Second, to know the costs, that is, the total amount invested in marketing during the same period.
The calculation is simple, and is by the following formula:
ROI is obtained from the total revenue value subtracted from the amount and by the same amount invested. The amount invested is also called costs.
For example: let’s say a brand ran a marketing campaign for a period of three months and wants to measure the marketing ROI for this period. Considering that the company has obtained a total revenue of R$200,000 and the initial investment was R$40,000, the calculation would be as follows:
Marketing ROI = (R$200,000.00 – R$40,000.00) / R$40,000.00
Marketing ROI = 4
In this case, we see that the Return on Investment was 4 times greater than the initial investment. A common practice is to multiply this value by 100 and obtain a result in percentage. In this way, the ROI is 400%.
Why is ROI important?
Calculating ROI is a metric that phone number taiwan measures how much money you have earned from marketing, paid media, events, and advertising. It is also possible to compare two ongoing campaigns. This makes it easier to decide which one deserves more investment, dedicating a larger budget to the one with the best performance.
Analyzing the previous results of this indicator allows you to set goals that are more appropriate to the company’s reality. In other words, if the company achieved a 50% ROI in a campaign, there is no point in trying to achieve a 500% ROI in the next campaign. Although surpassing previous results is an objective, it is essential to consider the results that the company can achieve.
Advantages of working with ROI
Calculating ROI is not important for a specific area of the company. It is essential for the business itself. After all, investors want to know the return they will get on their investments and from there assess whether or not it is worth dedicating budget to such a campaign.
