How to calculate your marketing ROI?

Marketing return on investment (ROI) measures the profits generated by all your activities or specific campaigns compared to the expenses incurred. This indicator allows you to know their real cost, to better guide your action plan. hipto guides you through the key steps to calculate marketing ROI , understand its importance, use the right tools.

What is marketing ROI?

Marketing ROI measures the profitability of your actions by comparing the benefits generated to the costs incurred. It is expressed phone number database either as a percentage or as a value. A positive ROI means that your marketing efforts are paying off, a negative ROI indicates a loss.

Formulas for calculating your marketing ROI

Marketing ROI calculation formulas transform your raw data into precise, actionable performance indicators.

Basic ROI Formula

The standard ROI formula is: (profit – cost)/cost. For example, if you invest €4,000 in an advertising campaign and generate €10,000 in the first instance court’s judgment revenue, your ROI is: (10,000 – 4,000)/1,000 = 6:1 or 600%. €1 invested brings you €6 in revenue.

Formula to calculate your ROAS

ROAS (Return on Ad Spend) measures the return on investment of your advertising spend. Its formula is: revenue attributed to a campaign / expenditure incurred. For example, if you spend €500 on advertising and generate €2,000 in sales, your ROAS is 4:1.

Factors to consider in your calculation

They guarantee reliable, more singapore number relevant results, by refining your marketing ROI calculation.

The cost of a lead

The cost of a qualified lead (CPL) is used to evaluate the effectiveness of your acquisition campaigns, designed to generate leads. Calculate it by dividing your marketing expenses by the number of contacts generated. For example, if a campaign costs €1,000 and generates 50 leads, the price of a lead is €20.

Direct and indirect costs

Direct costs include marketing expenses. Indirect costs include salaries, software, hardware. Include both types of costs in your ROI calculations to get the full picture.

The Lifetime Value

Lifetime Value (LTV) is the total profit generated by a customer over their entire relationship with your brand . Calculate it by multiplying the average order value by the purchase frequency and the length of the customer relationship. Integrating LTV into your ROI provides a long-term view of your marketing investments.

For example, if a customer spends an average of €100 per order, three times a year and remains loyal for five years, their LTV is €1,500. This information helps justify a higher customer acquisition cost for high-value customers.