Return On Investment
What is Return On Investment (ROI)?
In digital advertising, return on investment (ROI) measures the profitability of an ad campaign by comparing the revenue generated to the cost of running the ad campaign. ROI helps advertisers understand how effectively their ad budgets are being used and whether a particular ad campaign is delivering the desired result.
How to Calculate ROI?
ROI = Revenue Generated from Ad Campaign - Cost of Ad Campaign x 100 / Cost of Campaign
For example, if an advertiser spends $10,000 on an ad campaign and generates $50,000 in revenue, the ROI would be:
ROI = (($50,000 - $10,000) / $10,000) x 100 = 400%
This means the campaign generated a 400% ROI.