Premium Content: How to do ROI, the practical guideMay 07, 2021
By Nick Bottai - Co-Founder/Director @ The Marketing Leaders Ltd.
- What is ROI
- Classic Formula
- ROI complexity
- Adapt the formula to the complexity
What is ROI
We spoke about ROI in the TML Blog and you probably already know about it. But let’s keep it simple and start from the basic.
ROI, the acronym for Return Of Investment, is a parameter that measures the effectiveness of the money invested. It answers the question: “how much did £1 generate when I invested it”? As Andrea said in his first article, Measuring ROI in marketing, “…ROI ensures that marketers keep a commercial frame of mind, caring for being creative, innovative, creating brand impact and also for affecting the bottom line.”
If you hear that ROI justifies the marketing activities, run away. It means the person attesting this doesn’t understand how marketing works and it’s pointless to start lecturing what you’ve learned in years of study and practice.
From a certain point of view, ROI could justify the marketing investments: should I launch a campaign? Should I put more or less money? ROI is not a bonding curve, is more likely a bell curve. A good marketer finds the right investment amount to maximise the ROI and stay in the ascending part or at the top of the curve.