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How to Measure ROI (and Why It’s So Important)

ROI is one of the most important metrics you can measure in the marketing world.

Marketers heavily rely on data to determine whether their campaigns are a success. We often measure things like click through rates (CTRs), search engine rankings, conversion rates, and more to evaluate the results of experiments and see if we’re headed in the right direction.

But there’s one metric that rises above all the others: return on investment, or ROI. Why is this metric so vital, and how can you measure it?

Why ROI Is So Important

Return on investment (ROI) is a measurement of how much value your campaign has returned, compared to how much you’ve spent on it.

This is important because it measures both the results of your campaign and its efficiency. You may have a fantastic PPC advertising campaign running, with a high conversion rate and an endless stream of inbound traffic, but what if you’re spending $10,000 a month to do it and you’re only seeing $9,000 in new sales?

Conversely, you may only be seeing $500 in new sales for the month – but if you’re spending just $100 on marketing, that represents remarkable efficiency.

Ultimately, ROI will be what tells you which strategies to invest more heavily in, and which ones to abandon. It will be the overall barometer for the effectiveness and reliability of your campaigns.

How to Measure ROI

Different marketing campaigns must measure ROI in different ways, since they have different vectors for success. However, the general formula is always the same.

On one side of the equation, you have costs. These are things like the cost of printing, agency fees, ad placement costs, and the hourly wages of your marketing employees.

On the other side, you have net gains. How many people are visiting your site because of this campaign, specifically? How many of those people are buying from you? And how much are they buying?

It’s a bit complicated to figure out without the help of a comprehensive data analytics platform, but it can tell you everything you need to know about the health of your campaign. Need help getting started? Contact Quez Media for a free consultation today!

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