Return on Investment (ROI)
A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.
Return on Investment (ROI) is a ratio that measures the potential return on a specific investment relative to its cost. In marketing, it’s used to determine whether ad spend or content creation is generating enough profit to be sustainable.
Why ROI Matters
- Budget Allocation: Marketers divert budget to channels with the highest ROI.
- Justification: It provides the proof needed to justify marketing spend to stakeholders.
- Scalability: Positive ROI campaigns can often be scaled up to increase total profit.
How to Calculate ROI
ROI = (Net Profit / Cost of Investment) × 100
More on cro
The Complete B2B Lead Generation Guide for Service Businesses
Stop guessing. This definitive blueprint covers how high-ticket B2B service companies build automated, reliable lead generation systems that actually convert.
The $10,000 Mobile Blind Spot: Why Your Desktop-Approved Website Costs You B2B Leads
Founders check their website on a 27-inch monitor. Their leads check it on a phone. This gap is costing you high-value customers every single week.
Related Concepts
Conversion Funnel
The set of steps a visitor takes on a website to become a customer, visualized as a funnel that gets narrower at each stage.
CAC (Customer Acquisition Cost)
The total cost of winning a customer to purchase a product or service.
A/B Testing
A method of comparing two versions of a webpage against each other to determine which one performs better.