ROI calculations for marketing campaigns can be complex.
But understanding the formula is essential if you need to produce the best possible results with your marketing investments.
In my opinion the best formula for marketing ROI is:
(Gross Profit – Marketing Investment)/Marketing Investment
You can also use this other formula:
Profit = Revenue – Cost of goods sold (COGS)
In any case Marketing campaigns are investments. And like any other investment, they have to be measured, monitored and compared to other investments in order to be sure that you use your money correctly.
With solid ROI calculations, you can focus on campaigns that will be more profitable to your company.