Return on Investment (ROI) is a measure of the profitability of an investment, calculated as the ratio of net profit to the cost of the investment. ROI is a key metric for assessing the effectiveness of marketing campaigns.
For example, if a $1,000 ad campaign generates $5,000 in sales, the ROI is 400%. This metric helps businesses determine which efforts deliver the most value and optimize their budgets accordingly.
A strong ROI indicates efficient use of resources, while a low ROI signals the need for adjustments. Marketers use ROI to evaluate campaigns across channels, from digital ads to content marketing. Tracking ROI ensures strategies align with business goals, enabling data-driven decisions that maximize profitability and growth.
