What Is Marketing Roi? Definition of Marketing Roi, Marketing Roi Meaning and Concept

The marketing ROI concept refers to a metric that is responsible for measuring the benefit of a previously planned marketing action.

A roadmap includes different marketing actions that are organized based on prior research and planning. After selecting the ones to be implemented, they are put into operation and to assess whether they have been profitable or have had an important contribution of value to the company, they must be measured. The Marketing ROI metric takes care of this.

It is necessary to know if the investment made for the implementation of these actions has a return. For this reason, it must be taken into account to assess what has been carried out and see what has been profitable or not to make use of that particular strategy in the future.

Steps to make a marketing ROI

On many occasions, what prevents carrying out this phase in the implementation of strategies is the lack of knowledge of how to do it.

Here are the steps to make a Marketing ROI:

Plan and choose the indicators

This action has several steps to follow. You must think of an objective that the company has, create a strategy for that objective, implement it and then assess what happened.

For example, the objective is to get subscribers for a cooking blog and carry out email marketing campaigns. For this, a free ebook has been created on the company's website for people to download and thus obtain their email to achieve both actions.

The indicators that will be chosen to make the measurement could be: measure the participation rate, the number of downloads, comments if it is done through a Facebook ads campaign generating an ad, among others.

Apply the formula

To know the ROI of Marketing it is necessary to apply a formula that would be the following:

ROI = (Profit-investment) / investment

A priori it seems simple, but it gets complicated depending on the indicators and the data that we have generated. Not all actions generate specifically measurable data.

However, an example of this would be the following.

  • Benefit: Continuing with the previous example, to consider that the strategy is being optimal in terms of benefits, the goal is to achieve 2,000 monthly downloads. That is, 2000 subscribers. The download per subscriber generates us, monthly, 0.2 euros.
  • Investment: The investment made can be the cost of creating the ebook. For example, 100 euros.

ROI = [ ( 2000 x 0.2 ) – 100 ] / 100 = 3

This tells us that the return on investment is 3 euros per month for each euro invested. Obviously, in two months, if the downloads continue, the ROI will grow.

With these data, the previously exposed formula could already be determined.

All this really determines what has been achieved with a strategy and if the objectives that were previously had were realistic.

This type of study will help to avoid repeating strategies and actions that have not been profitable for the company with the aim of replacing them with others or changing the strategy to check if the problem could be in the indicators, the objectives, the company itself. strategy or how to implement it.