Return on Investment (ROI) is the revenue received versus the investment made. It is expressed as a percentage and calculated by dividing the total return by the total cost. For example, if a company invested $5,000 in a project and made $7,500 ($7,500 – $5,000 = $2,500), the ROI is 50% ($2,500/$5,000).
ROI reflects the success of any investment and provides insight about how profits can be increased. It can be applied to many business aspects, including “new product reporting,” which analyzes how much revenue was generated against the cost to create, promote, and sell the product. “Smart HR” tracks performance versus salary of sales team members. “Integrated tracking” analyzes the success of a marketing campaign – this can be hard to do in traditional channels but is much easier in digital marketing.