Definition of return on investment (ROI)

Return on investment (ROI) is a metric used to measure the profitability of an investment, providing insight into the efficiency and success of a marketing campaign or business initiative.

Explanation of return on investment (ROI)

ROI is calculated by comparing the gains or benefits against the cost of the investment, expressed as a percentage or ratio.

Example of return on investment (ROI)

Calculating the ROI of a digital advertising campaign by comparing the revenue generated against the total advertising costs.

Strategies of return on investment (ROI)

Set clear goals, track expenses and revenue accurately, and regularly assess and adjust marketing strategies for optimal ROI.

Related terms

• Key performance indicator (KPI)
• Cost-benefit analysis
• Marketing analytics