![]() The ROMI may differ depending on the reporting period and won’t show an accurate picture. You’ll account for marketing costs in one month and the income in another. Customers may see your ads in these industries and only purchase in several months. If you are in real estate, auto business, or selling expensive household appliances, we don’t suggest you rely on the ROMI. In that case, your ROMI may decrease, though it has nothing to do with your ad campaigns. Suppose you launched ads, and your best sales rep decided to quit, or you faced supply issues. When calculating the ROMI, consider all factors influencing your sales. It lets you quickly optimize your advertising and invest in more cost-effective channels. The ROMI demonstrates how various campaigns influence your sales. We found out that Instagram ads were cost-effective while other channels were not. The negative ROMI means we earned less than we spent. Your income is $18.ĭeduct the advertising expenses from the income: 18 - 69 = −$51. Let’s say customers we acquired via Google Ads only bought 2 lamps. The ROMI of 95,6% means emails are not cost-effective, but at least we managed to recover our investments. Then, deduct advertising expenses from your income: 45 - 23 = $22.ĭivide the number obtained by the number of advertising expenses and then multiply by 100%: Suppose customers bought five lamps after they got emails from you. The ROMI is 291,3%, meaning that Instagram ads are cost-effective as they generate about 2,9 dollars for each dollar invested. Then we divide the number obtained by the number of advertising expenses and multiply by 100%: ![]() Then let’s deduct the number of advertising expenses from income: 270 - 69 = $201. Let’s say customers from Instagram bought 30 lamps for $14 each. ![]()
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