Why is it believed that ROI cannot be improved?
Posted: Tue Feb 18, 2025 10:33 am
If something doesn't produce the results you want, stop using it. This is what happened with ROI.
Surveys have shown that thousands of marketers around the world have stopped using ROI as a metric because they feel it is no longer accurate in measuring the effectiveness of a marketing strategy.
Has ROI suddenly failed? Is it no longer relevant? No. Many marketers have done away with it, but it needs to be resurrected.
Too many marketers failed to understand how ROI was calculated. They were using the wrong numbers, rendering the metric meaningless.
Instead of backtracking to figure out where they went wrong, they declared ROI dead. After all, why focus on something that clearly isn't helping us?
Before you can understand why ROI was ghana phone number list declared dead, you need to understand why the metric was designed in the first place.
The ROI metric is useful when evaluating capital projects. The investment is made once, making it easy to see what the immediate return is.
Advertising is an investment, so it would make sense to look at ROI. The problem is that most people spend money on advertising every month.
It is often a short-term expense with a short-term return. For those who want to look at the long term, it is difficult to understand how ROI influences the strategy. After all, if you spend money on SEO strategies , it could take months to really see how it works.
Marketing in general can take even longer because it involves managing customers at all stages of the sales funnel.
To calculate ROI , you look at the net profit return divided by ad spend. However, if they don’t see that net profit return, marketers argue that ROI is a useless metric.
Surveys have shown that thousands of marketers around the world have stopped using ROI as a metric because they feel it is no longer accurate in measuring the effectiveness of a marketing strategy.
Has ROI suddenly failed? Is it no longer relevant? No. Many marketers have done away with it, but it needs to be resurrected.
Too many marketers failed to understand how ROI was calculated. They were using the wrong numbers, rendering the metric meaningless.
Instead of backtracking to figure out where they went wrong, they declared ROI dead. After all, why focus on something that clearly isn't helping us?
Before you can understand why ROI was ghana phone number list declared dead, you need to understand why the metric was designed in the first place.
The ROI metric is useful when evaluating capital projects. The investment is made once, making it easy to see what the immediate return is.
Advertising is an investment, so it would make sense to look at ROI. The problem is that most people spend money on advertising every month.
It is often a short-term expense with a short-term return. For those who want to look at the long term, it is difficult to understand how ROI influences the strategy. After all, if you spend money on SEO strategies , it could take months to really see how it works.
Marketing in general can take even longer because it involves managing customers at all stages of the sales funnel.
To calculate ROI , you look at the net profit return divided by ad spend. However, if they don’t see that net profit return, marketers argue that ROI is a useless metric.