In Internet marketing, ROI is the return on investment. It reflects the profitability of your investments. The easiest way to calculate ROI is to deduct the marketing costs from the total profit and divide the balance into them. The formula for calculating ROI:
Thus, using ROI, you can understand whether your investment in advertising is effective.
If this indicator is more than 100 % — your investments are bringing you profit if the indicator is less than 100% — your investments are unprofitable. It’s very important to monitor ROI in all stages of the advertising campaign to correctly allocate your budget and increase the effectiveness of advertising.
How to increase ROI
In order to increase ROI of online advertising it is necessary to follow some rules. For example, for your goods or service promotion, you should use several advertising platforms. Also, it should not be forgotten to monitor the efficiency of all distribution channels and, if necessary, stop advertisement on some of them. It is important to remember about the landing page of the site, to which the user arrives on after clicking on the advertisement. This page should be relevant to your advertisement, because when they are different it is most likely that user will leave the page of the site without buying. Therefore, make sure that the user lands exactly where the ad promises.
It is equally important to compose a competent advertisement that best meets the user's initial request.
If you follow all of the above recommendations, you can achieve an increase in ROI.