What do we mean by ROI?
In simple terms, ROI means Return on Investment. It is an important measure for any business as it helps to gauge the return percentage on the total cost incurred for the business. Every organization needs to assess the return on investment made to help judge the campaigns’ success.
In the usual business landscape, the cost is generally calculated figuring in the operational and capital expenditure, as well as the depreciation charges and reserves. In the case of advertising, however, it is only the media spent.
Revenue, on the other hand, is the aggregate of income generated. To assess the ROI, we would first need to minus the advertisement cost from the revenue and derive the margin. The ROI is calculated using the simple formula below and is expressed in a percentage.
ROI = (Revenue – Ad Cost)/ Ad Cost *100
How does the Return on Investment Calculator help?
ROI is an important yardstick to measure business success and the ROI calculator makes it easier to calculate. All you need to do is feed in the total cost and the total revenue, the tool will show you your accurate ROI percentage.
Additionally, the tool also renders the figure on Return on Ad Spend (ROAS). ROAS is the number derived by Dividing the Total Revenue by the ad spent. This is also expressed in percentage.
Where is it used?
The ROI calculator comes as a handy tool for advertisement campaigns. In the digital marketing industry, it is imperative to calculate ROI for Pay Per Click (PPC) for Google Ads, Bing Ads, or even social media paid advertisements. Other media buying efforts also require an accurate measure of ROI for further optimization of their ad campaigns.
The ROI calculator tool can help these businesses with accurate information without requiring manual intervention.
Start calculating your return on investment for your campaigns.
Be sure to follow #ToolThursday for a compilation of our weekly tool releases.