How to Analyze Your Digital Marketing Strategy

Most digital marketers are familiar with the performance metric ROAS (Return on Ad Spend), but is ROAS the core metric we should be looking for? What about using Romi (Return on Marketing Investment) or other metrics to see if you're better serving your clients or internal teams?

Sure, ROAS and ROMI are both valuable metrics, but which one should you focus on?

What is ROAS (Return on Ad Spend)?

Return on Ad Spend, also known as ROAS, is a marketing metric that evaluates the performance and financial returns of a digital advertising strategy, campaign or ad group. Using and measuring this metric can help companies improve their advertising strategies and financial returns.

ROAS is calculated by dividing the total revenue figures of an ad development program by the total expenses (revenue/expenses).ROAS is usually displayed as a percentage.

The main benefit of using ROAS is the simplicity of calculating this metric.Digital Marketing Agency in singapore It is a quick and effective way to analyze the relative effectiveness of several online advertising development programs.

ROAS does not take into account the profitability of a product; ROAS goals vary from business to business, so it's important to understand what ROAS goals are profitable for any marketing campaign you're running.

What is ROMI (Return on Marketing Investment)?

Return on Marketing Investment (Romi) is the profit attributable to marketing (minus marketing expenses) divided by the "investment" or risk-reward of marketing.Romi is different from other "Return on Investment" (ROI) metrics because Marketing is not the same type of investment. Marketing funds are usually "at risk" rather than "tied up" in factories and inventories (often referred to as capital expenditures or capex). Marketing expenses are usually current expenses (operating expenses or opex).

ROMI is calculated by dividing the net revenue of the advertising program by the cost of the campaign and multiplying by 100.

((Revenue - Cost to Run Campaign)/Cost of Campaign Time)*100

Romi is usually expressed as a percentage.

ROMI provides business managers with a direct view of the returns that a marketing investment company can generate through ROMI is an indicator that can be selected for direct analysis and comparison with investments and other business development opportunities, such as investments in new business locations or product lines. This view is useful when making your own management decisions about whether investment behavior should be directed at network marketing or other investment opportunities.

The challenge with using Romi to analyze performance is that many companies in the digital space view digital marketing investments as a core cost of doing business. Most companies just don't have the option to reduce their digital marketing budget if they are going to continue to grow their business.

When should you use ROMI?

For the vast majority of digital marketing executives in organizations with an e-commerce focus, it is recommended that ROAS can be used as a primary job performance evaluation metric, especially if digital marketing is a major source of financial revenue for your business.

Romi should not be completely ignored as it still provides business managers with valuable data on digital marketing returns compared to other investments.

ROMI organizations ROAS

6