Knowing the profitability of an investment is essential in Marketing. To calculate it, the most widely used formula is the ROI ( Return On Investment ) which allows us to know if the campaign we have carried out has had a positive or negative economic return for the company.
In this post we are going to learn in depth:
What is ROI.
How to calculate Return on Investment in Online Marketing.
Online tools to calculate it.
Tips to improve Return on Investment.
seo performanceWhat is ROI?
ROI or Return on Investment is a ratio/formula used by companies armenia telegram data determine the results obtained from an investment or group of investments.
Tracking Return on Investment allows you to know whether the money invested in a campaign has generated profits or losses in economic terms.
The goal when calculating ROI is to know how many euros a campaign has generated for each euro invested.
Why is it important to know the Return on Investment?
The main objective of both Offline and Online Marketing is to generate sales . Because of this, knowing the return obtained for each euro invested in a campaign becomes essential.
The first reason why ROI is important is because it allows us to know whether a campaign, in economic terms, has been successful or not .
Knowing the return on a campaign also helps us plan the steps to take in the future. In this way, campaigns that have had a negative return will be eliminated, improved or replaced by those that do work in the planning.
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Important elements for calculating ROI
Goals
Knowing the objective of the campaign to be carried out is essential, as it directly affects the rest of the elements necessary to calculate the ROI. In addition, it must be decided before carrying out the campaign . The main objectives are:
Economic transaction: companies can create campaigns aimed at selling their products or services. This would be the simplest and most commonly used case within the business world.
Leads : with this type of campaign, companies seek to get users to perform a certain action on the website, such as filling out a form. The difference with the previous objective is that it has no monetary value at the moment, although it may have one in the short or medium term.
Branding: This type of campaign is designed to create, maintain or improve the awareness and positioning that users have about the brand. Calculating the ROI in these campaigns involves a different process that we will see later.
The main objectives of an Online Marketing campaign are: Conversion, Leads and Branding
KPI's
KPIs or Key Performance Indicators are performance indicators that allow us to assess whether the objectives we have set are being met. For each objective, you must establish different KPIs and this is done before carrying out the campaign.