ROI – Return on investment is one of the basic indicators of return on investment and the success of the campaigns or website in general.
ROI is a statistical tool used to calculate the effectiveness and value of your investment. Indicates the profit or loss of an investment by comparing and measuring the amount of return on investment with the investment costs made.
It shows the ratio of money earned to money invested.
ROI therefore indicates the return as a percentage of the amount spent:
Calculation of ROI (%) = (Investment income – investment costs) / investment costs
ROI (%) = (1500 – 500) / 500 x 100
So, your ROI will be 200%, which means your investment will pay off and the campaign was successful for you. In case, when you sell only 5 watches, your ROI will be 0%, which means your invested money will return, but you didn’t earn anything.
In addition to your overall campaign performance report, you can also use ROI to make reports at the keyword levels.
If you have well-structured campaigns and are measuring conversions, you can decide which specific keywords to show in your ad and which, on the other hand, won’t pay off.