What Is ROI?

What Is ROI?

ROI, initials for Return On Investment, measures the gain or loss generated by an investment in relation to its initial cost. It allows the reader to gauge the efficiency and profitability of an investment and is often used to influence financial decisions, compare a company’s profitability, and analyze investments.

When you invest in traffic or campaigns, your ultimate goal is to generate profit (surely not to lose money) which means you want to get to a positive ROI.

How to Calculate ROI?

Return on investment is a simple ratio of the gain from an investment in the traffic/media relative to the amount invested to get it. You can calculate ROI by dividing net profit from the campaign (revenues generated – cost of traffic investment) by the cost of traffic investment.