ROI: Return On Investment

A performance measure used to evaluate the efficiency and profitability of an investment. The formula for ROI is: Gain from Investment minus Cost of Investment, divided by Cost of Investment. The result is expressed as a percentage or ratio. If ROI is negative, then that initiative is losing money. The calculation can vary depending on what you input for gains and costs.

Marketers should measure the ROI on every tactic and channel they use. Many facets of marketing have fairly straightforward ROI calculations (like PPC), but others are more difficult (like content marketing).