?? Understanding ROI in Digital Marketing

ROI (Return on Investment) in digital marketing refers to what you gain compared to what you spent. It’s a critical metric that helps you evaluate the effectiveness of your marketing efforts. Here’s how it works:

What Is ROI?

ROI represents the profit earned from every dollar your business invests in marketing efforts.

A positive ROI means you’re making more than you invest, with the customers you attract offsetting the campaign costs.

Conversely, a negative ROI occurs when you spend more on marketing than you earn from it.

Why Measure ROI?

Determine campaign success: Set a target ROI at the campaign’s start and assess whether it delivered the desired results.

Optimize strategies: Measuring ROI reveals what’s working and what isn’t. Adjust your efforts accordingly.

Reallocation: Allocate resources to high-yield channels and phase out low-performing campaigns.

How to Calculate ROI:

Use this formula:

ROI= (Net?Profit/Total?Cost)×100

Net profit: Revenue directly driven by marketing efforts minus marketing expenses.

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