ROI, ROMI, ROAS – three Rs for calculating return on investment

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Depending on which cost items we are interested in, we can use three different formulas:

1. To determine the payback of a project taking into account all costs, the ROI indicator is calculated. All total income and costs for the project, including the production of the product/service, are taken into account.

ROI formula:

ROI formula

How to Calculate ROMI and ROAS
2. To determine the profitability of the marketing channel costs afghanistan email list only, the ROMI indicator is used. The calculation includes the advertising budget, billboard rental, payment to the contracting agency, and printing. Production costs are not taken into account.

ROMI formula

3. If you need to determine the effectiveness of a specific advertising channel, use the ROAS coefficient. The formula takes into account the income and cost of one campaign.

ROAS formula

How to Measure ROI in Digital Marketing
Digital marketing is the promotion of a product using digital technologies – the Internet, TV, radio. The difficulty in calculating ROI for these channels is that the final chord of the sales funnel is not always the main goal of an advertising campaign. Sometimes campaigns are created to enhance the brand’s reputation, to make the product name known to everyone, to increase traffic, etc. Depending on the goal, the values ​​in the ROI formula will also change.

Below are the key metrics that will help us calculate the profitability of advertising channels in the digital sphere.