Return On Investment (ROI) is one of the most widely used metrics in marketing. It is a measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments and is therefore used by companies from many different business sectors.
The ROI is calculated by subtracting the costs of an investment from the profit gained throughout this investment, and then dividing it by the costs of the investment again. Since ROI is measured as a percentage, it can be easily compared with returns from other investments, allowing companies to measure different types of investments against one another.
The Return on Investment is a very popular metric, because it enables marketers to easily compare different marketing strategies in terms of their efficiency. Accordingly, it can be a guideline for marketers to determine, which marketing strategy might be the best to monetize their product.