Return on marketing investment is attributing net of spending for marketing campaigns to profit. It has more variables than the basic Return On Investment or ROI calculations because marketing is slightly a different kind of investment. For solutions catering to this kind of need, marketing ROI calculators have developed applications that need more variable input in order to arrive in a return on investment. It measures the market’s response to a marketing campaign, translated into profit. With that being said, it also aids in making informed decisions on which campaigns are effective and which campaign is considered losing. A losing campaign is just considered a useless spending and could have been a profit if it was slashed as soon as it shows signs of losing. Thus, it is also a tool to justify certain marketing expenses.
Marketing investments or marketing funds are considered a ‘risk’. These are expenses for the current period, expected to yield sooner, and not for long-term analysis and goals. This idea of determining sales and profit from the market response is not new. If a marketing ROI calculator returns a positive value, it means it is a good campaign. The higher the positive number is, the higher the gain and proves how effective it is. If the marketing ROI calculator gives a zero result, it means the campaign is not effective. Nothing was lost, but the time, effort and resources utilized were put to waste. When the calculations return a negative result, it means that the company lost this particular investment, a red flag which means that it needs to be stopped, and the investment lost must be regained.
Marketers around the world find this tool very useful. It determines the fruit of their hard work and puts pressure on them to show more returns on their respective marketing campaigns. Previous ROI calculations can be stored for historical reference to determine which campaigns should never be undertaken again. It saves businesses and it promotes business growth. In the development of technology, web ads are now considered a marketing tool but its scope is too broad that gaining from it is a hit or miss. But with the use of a marketing ROI calculator that transforms current traffic, average sale and conversion rate to useful ROI information, web ads can be a sure-fire success.