SpinSix Strategic - Marketing Design

ROI stands for "Return on Investment." It is another way of saying "bang for the buck" – for instance, how much did we get back for each dollar spent on advertising? Anything over a dollar is positive ROI; anything less is negative ROI. Naturally, the higher the ROI of any investment in marketing, the better.

At any given time, there are an infinite number of marketing initiatives that your firm could be starting. But resources are finite. So how does the sophisticated marketer decide which programs to fund? The goal of ROI marketing is to determine the value of a marketing expense so that you can compare the effectiveness one marketing program (or advertising method or campaign) with another and make optimal decisions regarding the allocation of resources.

For example, if you sell a software product for $199 per copy and it costs you $100 to build, support, and ship the product, that leaves you with a profit of $99 after the sale of each copy. If you spend $5000 to promote your software through a pay-per-click (search engine marketing) campaign, and it results in the sale of 100 copies, you will have made $9900 in profit with a return on your investment of $4900 (or $49 per copy).

If you run a second online marketing campaign using a different promotional method (say, banner advertising) and it results in a profit of $29 per copy, you know that PPC advertising is usually going to give you a better return of your investment than your banner ad campaigns. If you have a limited budget, you may decide to spend all of your marketing dollars on PPC advertising.

SpinSix specializes in calculating marketing ROI and factoring those metrics into every campaign we run—both online and offline. In addition, we offer LINCS, our proprietary technology platform, which helps bridge the gap between sales and marketing by routing real-time conversion and sales data from both your online and offline campaigns to your CRM (customer relationship management) system or marketing database to enable you to integrate highly personalized lifecycle data into your email and SMS marketing campaigns.

See Also:

A/B Testing, Analytics, Competitive Research, Data Mining, Market Research, Website Analytics, Website Usability Testing