Return on Investment (ROI) is how much revenue you getting back for each $1 you spend. A positive ROI means that you're making more than you've spent. A negative return on your investment means that you're losing money on your investment.
To calculate ROI divide the amount returned by the amount invested.
ROI in practice:
You invest $25 in advertising. After a week of advertising, you make $60 back.
ROI = 60 (the amount you made) / 25 (the amount spent) = 2.4
In the above scenario, you made back 2.4x what you spent, or $2.40 per $1 you put in. You're making more money than you're losing, which signals that your investment is worthwhile.
Check Your ROI
Your dashboard displays your ROI when you set up your Conversion Audience.
In order to know how much you're making back on your campaigns, we need to know:
- What a success is to you
- The value of each success
To define success, set up your conversion audience.
A fixed value for each conversion means that each conversion is worth the same amount to you. If order values for your business do not change much from order to order, this is a good option.
To calculate how much revenue your campaign has generated (for fixed values), multiply the number of attributed conversions by your conversion value.
Calculating attributed revenue with a fixed conversion value:
You set your conversion value as $20, and subsequently we log 20 conversions that can be attributed to one of your campaigns.
Attributed revenue = $20 x 20 = $400
Dynamic Value (Enhanced Conversion Tracking)
If you have an e-commerce store, order values will most likely differ from customer to customer. In this case, it is more accurate to use enhanced conversion tracking to dynamically capture your order values (translation: capture what your customer actually spends on their order).
- Learn more about how enhanced conversion tracking..
- Check if we have specific instructions for your platform..