What is ROI? Advertising and Marketing ROI Explained for Beginners

What is ROI? ROI stands for Return on Investment. The definition of ROI is the total profit earned from an investment. In terms of Marketing and Advertising, Return on Investment will look at a total investment into business costs and Marketing campaigns and look at the return of revenue while factoring in other costs. What you want to do is look at your revenue, subtract the costs to get your profit, and then divide that number by your costs. You can figure out your ROI as a percentage of your total investment.

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It is important to monitor and compare your ROI so you can see how your ads are performing through Google Ads, Microsoft Advertising, Facebook Ads, Twitter Ads, LinkedIn Ads, and more. In addition, you can look at your investment into Marketing in terms of Social Media Marketing, Email Marketing, and Search Engine Optimization (SEO).

ROI: Profit earned from investment in marketing or advertising

Example: Surfside PPC runs an advertising campaign. I spend $10,000 on advertising, $5,000 on costs, and drive $20,000.

What is my ROI?

ROI = (Revenue - Costs) / Costs x 100%
Revenue: $20,000
Costs: $15,000
ROI = 33.3%

What is a Good ROI?:

A positive ROI: I try to achieve an ROI of 10% or more. However, it depends on your industry, your goals, your competition, and other factors.