The essentials of marketing ROI
- The concept: Measuring the profitability of your actions. It answers the question: "Did I earn more money than I spent?"
- Calculation : (Earnings - Costs) / Costs x 100
- Utility: Sort out the good ideas from the money pits and justify your marketing budgets
- The board: A positive ROI is the sign of a sound strategy, but don't forget the cost of time!
In digital marketing, it's easy to collect likes and hits. But for an executive, the only data that really counts at the end of the month is the "likes" and "visits" ROI (Return on Investment). It's the justice of the peace: it separates the campaigns that make your image shine from those that really fill your order book.
Understanding ROI means transforming marketing from a cost item into a measurable growth lever.
What exactly is ROI?
ROI is the indicator that measures the profitability of an action. It's no longer a question of whether you've had traffic, but whether that traffic has generated value. To calculate it, we use a simple but implacable formula:
ROI = (Gains generated - Cost of action) / Cost of action x 100
Concrete example: You invest €1,000 in an advertising campaign that generates a €3,000 margin. Your ROI is 200%. This means that for every euro invested, you've recouped two in pure profit. This is the green signal to continue, or even accelerate!
Why is it the compass of choice for decision-makers?
Tracking your ROI allows you to accurately manage your business:
- Optimize in real time : Why wait until the end of a campaign to see that it's not profitable? Regular ROI monitoring allows you to make immediate adjustments
- Enhancing the value of marketing work: It's the ideal tool for proving to your management that your digital actions are a concrete engine for growth
- Compare channels : SEO, SEAsocial networks... ROI tells you where to invest your next euro
Calculation traps to avoid
For your ROI to be "true", you have to be honest with your figures:
Include in your costs
- Advertising budget
- Software subscriptions
- Agency fees
- Time spent by your teams
Don't forget
- Image ROI (Branding)
- Intermediate objectives
- Long-term customer value
- Indirect conversions