Marketing ROI

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Marketing ROI

Return On Investment

What do you get when you add Marketing to ROI (Return on Investment)? The answer is not as straight forward as you might think. The best way to explain this is by an example as follows:

The Marketing Department puts forth a campaign with a cost of $10,000. The new revenue that the campaign brings in is $20,000. As first glance, one might say that the Marketing Department doubled their money and that the campaign was very successful.

Let’s look at this a little different for a minute. If the company has a profit margin of 50%, that would mean that the remaining 50% relates to the cost of the product. In this case, that would make it $10,000. (50% of $20,000)

The results are as follows:

Marketing campaign              $20,000 Revenue

Subtract:

Campaign costs of$10,000
Product costs of$10,000
Combined Cost$20,000

The resulting Marketing ROI is                         $0

In this case, the Marketing ROI is zero. Not the result that we anticipated.

The conclusion here is that one needs to take great care into choosing the correct marketing campaign will result in a positive Marketing ROI. Good planning everyone

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Let’s Get Started!

COVID-19 Message

NetGain remains open during the pandemic.  Our team is working safely from home to help our clients through this unprecedented event.

As digital marketers, we are treating this interruption as a unique opportunity to help our clients stay active online and improve their web presence.  Together, we can transform a challenging situation into limitless opportunity.