ROI Calculator | How To Calculate ROI?
What is ROI? What is an ROI calculator? How to calculate ROI? What is a good ROI? How to increase ROI? The ROI calculator helps you quickly gain revenue from advertising.
ROI Formula – What is ROI?
The full name of ROI is Return on investment, which refers to the value that should be returned through investment, that is, the economic return that an enterprise obtains from an investment activity. Generally speaking, it is the ratio of the income we get to the input cost. ROI is affected by Invested amount and Returned amount. The calculation formula is as follows:
How to calculate ROI?
For example: Let’s say you have a product that costs $100 to produce, and sells for $200. You sell 6 of these products as a result of advertising them on AdWords. Your total sales are $1200, and your AdWords costs are $200. Your ROI is ($1200-($600+$200))/($600+$200), or 50%.
What is a ROI calculator?
ROI calculator is an advertising tool that does not need to do mathematical calculations on paper, but can directly provide you with instant results about the ROI of PPC campaigns.
The ROI calculator can save your campaign time and effort, and you can use the saved time in another high-priority area of your strategy. Google expands ROI calculator can provide instant, accurate and free ROI results, you can use our online ROI calculator at will.
How to use ROI calculator?
1. Go to the Google expansion store to install ROI & Roas Calculator
2. Click the installed ROI & Roas Calculator
3. Enter any two of Invested amount/Returned amount/ROI
4. Click calculate to query the third data
5. Click the reset button after querying
Benefits of using a ROI calculator
- There is no need to memorize the ROI formula, input the data to get the result
- Judge advertising revenue or loss by changing different numbers
- Calculator chrome extension can be opened at any time on any page
What is a good ROI?
ROI> 1: It means that the advertising effect is very good, the income is greater than the advertising fee, and you can continue to invest;
ROI = 1: It means that the effect and income of this part of the advertising investment are the same, and it can be adjusted or continued to be invested;
ROI <1: This is a warning. Advertising is losing money. If there is no other special purpose (to expand visibility), this part of the budget can be stopped.
However, different industries have different calculation methods for the revenue and advertising costs, which need to be adjusted according to the industry.
How to increase ROI?
First of all, we should conduct a specific analysis of specific categories, by analyzing the peak period of transactions, or according to the high conversion time period of the main transaction words, optimize the time of the discount by time period.
Optimize the delivery area
From the perspective of most categories, we can analyze the data from the Facebook ads cost tool in terms of the placement area, and then draw a conclusion to find out the areas with high conversion and high ROI for placement.
Search the crowd
Searching for the crowd is the most efficient and direct way to increase the ROI of e-commerce companies, because the click-through rate, transaction rate, and conversion rate are generally higher among the searched crowds. By applying a high premium to the high ROI crowd tags, the low ROI crowd tags Low premium or even no premium can increase our ROI. Recommended tools: ADCostly, AdTargeting.
Choose a good delivery platform
When e-commerce is promoting, the chosen delivery platform should try to choose channels with better conversions. As we all know, choosing a good delivery platform is an efficient way to increase ROI. When it is found that its conversion rate and ROI are significantly lower, the channel should be closed, leaving other platforms with high conversion and high ROI.
Improve website arrival rate
The low arrival rate is mainly due to the low bandwidth of some website servers and small line memory, which leads to slow opening speed, and some websites will have bugs and pages cannot be opened. At the current level, under normal circumstances, a website arrival rate of less than 95% is considered unqualified. So it is important to always pay attention to the opening of the website.
Conduct alliance cooperation
Cooperating with a trustworthy platform can not only save costs and time, but also expand the scope of business, thereby increasing roi and profits.