1,629% Return on Investment (ROI)
by Andrew Krebs-Smith | October 10
No, we didn’t put the decimal in the wrong place. Yes, this is somewhat misleading because it doesn’t take into account what the client is paying us to get these results. However, the results are impressive no matter what. First things first: let’s show you the data we are working with:
“Ok, I see a bunch of numbers. Where is this 1,629% you speak of?”
If you look at the third row from the top, you will see the following statistics:
“Ok, great. More numbers. And what the heck is a Desigual?”
The numbers that we are using to arrive at our calculation of ROI are $17.12 (the investment) and 277 Clicks (the return). To calculate ROI, you simply divide your return (return minus investment) by the investment to see how it paid off. For example, if you bet $100 at the Kentucky Derby and won $167, your ROI would be 67%. Or, if you bet $100 and only received $20 at the end of the race, your ROI would be, well, negative.
If you are paying attention, you should notice that there is still a problem. You can’t find ROI by dividing dollars by clicks – you need to use dollars as your return figure as well. So we need to decide how much each click is worth. Based on our client’s site traffic, they make about $50 in profit off every 50 people that visit the website. So in our case, each visit is worth approximately $1 of profit (assuming we are sending qualified traffic). Therefore, our 277 clicks = $277. We were able to spend less than 18 dollars of our client’s money, and get 277 clicks (worth approximately $277 dollars). This figure is incredibly high compared to industry averages. Do you know the ROI of your marketing campaigns?