What is marketing ROI?
Marketing ROI measures the profitability of your actions by comparing the benefits generated to the costs incurred. It is expressed either as a percentage or as a value. A positive ROI means that your marketing efforts are paying off, a negative ROI indicates a loss.
Formulas for calculating your marketing ROI
Marketing ROI calculation formulas transform your raw data into precise, actionable performance indicators.
Basic ROI Formula
The standard ROI formula is: (profit – cost)/cost. For example, if algeria telemarketing data you invest €4,000 in an advertising campaign and generate €10,000 in revenue, your ROI is: (10,000 – 4,000)/1,000 = 6:1 or 600%. €1 invested brings you €6 in revenue.
Formula to calculate your ROAS
ROAS (Return on Ad Spend) measures the return on investment of your advertising spend. Its formula is: revenue attributed to a campaign / expenditure incurred. For example, if you spend €500 on advertising and generate €2,000 in sales, your ROAS is 4:1.
Factors to consider in your calculation
They guarantee reliable, more relevant results, by refining your marketing ROI calculation.
The cost of a lead
THEcost of a qualified lead(CPL) is used to evaluate the effectiveness of your acquisition campaigns, designed to generate leads. Calculate it by dividing your marketing expenses by the number of contacts generated. For example, if a campaign costs 1,000 euros and generates 50 leads, theprice of a leadis 20 euros.
Direct and indirect costs
Direct costs include marketing expenses. Indirect costs include salaries, software, hardware. Include both types of costs in your ROI calculations to get the full picture.
The Lifetime Value
Lifetime Value (LTV) is the total profit generated by a customer over their entire relationship with your brand . Calculate it by multiplying the average order value by the purchase frequency and the length of the customer relationship. Integrating LTV into your ROI provides a long-term view of your marketing investments.
For example, if a customer spends an average of 100 euros per order, three times a year and remains loyal for five years, their LTV is 1,500 euros. This information helps justify acustomer acquisition costhigher for high value-added customers.
Why is it important to measure your marketing ROI?
