Marketing ROI
DefinitionGrowth
Marketing ROI
Profit attributable to marketing divided by its cost - the return on the spend, in margin terms. Stricter than ROAS, which counts revenue: a 3x ROAS on thin margins can be a negative ROI. Also structurally biased toward short-term, easily attributed activity, which is why optimising to it shrinks brand budgets.
Evidence from the library
Total ROI judges a channel, marginal ROI decides where the next euro goesPrincipleMarketing measures itself on only one side of the profit equationPrinciple50/50A roughly even 50/50 split between brand and performance spend delivers the highest total marketing ROI.StatProfit growth and ROMI are driven by almost entirely different effects - profit follows broad business effects and sales gain, while ROMI follows activation and is hurt by penetration growth.Stat47-59% brandMedia returns peak with roughly half to sixty per cent of the budget in brand buildingStat
Source
Marketing Definitions
standard practice; caveats per Binet & Field, Media in Focus (2017)
More from this source
DefinitionCustomer acquisition cost (CAC)DefinitionCustomer lifetime value (LTV)DefinitionLTV:CAC ratioDefinitionROASDefinitionMER (marketing efficiency ratio)DefinitionConversion rateDefinitionClick-through rate (CTR)DefinitionCPMDefinitionHook rateDefinitionHold rateDefinitionChurn rateDefinitionCreative fatigue