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Marketing ROI Definition
Marketing ROI (Return on Investment) evaluates the profitability of marketing campaigns by comparing the revenue or value generated against the money spent. It helps assess campaign effectiveness and guides future budget decisions.
How Marketing ROI Works
- Total campaign revenue is calculated.
- Marketing costs (ad spend, tools, content) are subtracted.
- ROI is expressed as a percentage or ratio: (Revenue - Cost) ÷ Cost.
- High ROI indicates efficient, profitable campaigns.
Example of Marketing ROI
A brand invests $10,000 in Facebook Ads and generates $30,000 in sales, yielding a 200% ROI.
Why Marketing ROI Matters in Advertising
- Quantifies campaign success and profitability
- Informs better budget allocation and decision-making
- Drives continuous improvement in marketing performance
- Aligns marketing with business growth objectives
