You probably already know the ROI indicator and how to calculate it to analyze the investment in your marketing actions, but do you know all the information that calculating the return on investment can give you? Google tools will allow you to know more about the impact of your actions so you can make the right decisions to achieve a successful marketing strategy.
Read each of our sections to learn more about calculating ROI with Google tools:
- The ROI or return on investment
- The calculation of ROI
- Calculating ROI from marketing with Google tools
The ROI or return on investment
Although you already know what ROI means, a little refresher never hurts, right? The ROI (Return On Investment) is the value generated by your marketing actions, or what comes to the same thing, the money that your actions have generated after investing in them, for example, investing in paid ads or email marketing. If you want to get real data from your marketing strategy, it is essential to analyze the impact of each of your actions.
Through ROI you can know which marketing actions have been more successful and which have not, and therefore which actions have made you make or lose money. This is why calculating ROI is such an important method for your SME, because you can know which actions are giving best results to your company and thus think about optimizing them to achieve greater success. Similarly, you can set goals based on your own results and progressively check whether it is profitable to invest in some channels or others.
In short, calculating ROI is a method that will help you find the most appropriate approach to achieve greater success with your marketing strategy.
The calculation of ROI
How about if we review the calculation of ROI? You already know that it is a simple mathematical formula, but remember that you must have both the amount of the investment made and the amount of the revenue generated by your marketing strategy before calculating the ROI. The calculation is as follows:
ROI = [(revenue – investment) / investment] * 100
Let’s take an example: let’s say you invested €200 for your latest marketing campaign and it generated €600 in revenue.
ROI = [(600 – 200) / 200] * 100
ROI = 200%
The ROI is positive, which means that your actions have had an effect and also covered your initial investment. However, what happens if the income obtained is less than the investment? For example, let’s say this time you invest £500 in your shares, but you only get £400 of income.
ROI = [(400 – 500) / 500] * 100
ROI = -20%
The ROI is negative, therefore, the income does not cover your entire initial investment and represents a loss of money.
Simple, isn’t it? However, remember that when you invest money in a marketing strategy, you don’t just bring in an amount of money. You must take into account, for example, the money you pay your employees for the time they work on one of your marketing actions, the payment for the time you and your team use your office, the payment for the tools to do the job, among other possible expenses. The more specific the figure of your investment is, the more realistic the ROI calculation will be after obtaining your income.
Calculating marketing ROI with Google tools
Google has become a great ally for SMEs, as its tools allow companies to know in detail the real data of their actions and their earnings. Google tools can also help you