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What is ROMI and where to start

What is ROMI and where to start

Posted by Juha Hurstinen on Oct 14, 2019 10:45:00 AM


Are you opting for the best return-on-investment (ROI)?

Is your company prioritizing your investments in the wrong places? How do you know?

Modernization has paved the way for professional insights that continuously innovate our conventional means toward success.

As there are many key performance indicators (KPIs) that measure and line up a company’s expenditures for quality assurance, one metric has virtually always been quite nebulous – return on marketing investment.

What is Marketing ROI?

Marketing ROI or return-on-marketing-investment (ROMI) is a sub-metric of ROI that measures the efficiency of a marketing campaign for the purpose of assisting better decision-making for future investments.

It has mainly comprised of online marketing as globalization has made communication more instantaneous through online marketing and because of web analytics, companies have been able to accurately formulate their ROMI and measure the effectiveness of their online marketing campaign[s].


You can see a simple representation of ROMI’s when you take the incremental value that attributes to a certain marketing campaign and subtract the marketing costs for the campaign itself. Taking that total and dividing it by the same marketing costs followed by multiplying it by 100 and you get your ROMI percentage.


The sales growth can be dissected by the following:

  1. 1. Incremental revenue attributed to marketing

a) Determine the total revenue within a given time period (i.e. monthly or quarterly).
b) Calculate the total revenue after the campaign launch
c) Subtract the base revenue from 1a. by the total revenue in 1b. to calculate the incremental revenue

2. Contribution Margin
    1. a) Price per unit minus the variable costs divided by the price per unit

However, these calculations for ROMI have been more precisely built into algorithms and conversed into simple and advanced analytics which would be made easily digested for customer needs.

Who values ROMI?

Why do we need it? At the end of the day, the objective is to increase optimization by continuously providing value and exponentially driving productivity upward.

Marketing is the benchmark of sustainable action that molds uniqueness and intent in a direction of success. Marketing should be thought of as an extension of oneself, and what better way to ensure success but, to have access to check-ups on a regular basis?

Without certain KPIs to set companies in check, money may be invested in the wrong campaigns, departments might wither, investments may not be prioritized properly for maximum efficiency, and competitors may use your weakness as their advantage.

Employers who understand this and are accountable for these measurements hope to move investments in the right direction and make decision-making easier.

Methods of calculating ROMI

There was once a time when online and offline ROMI required different amounts of attention because offline conversion data was more coarse-grained in terms of accurate proceedings.

This evidently led to stakeholders investing more in online marketing because KPIs were able to present viewable results; however, it did not always lead towards the correct results. It would lead to wasteful advertisements and campaigns that would fail, but investments would not stop coming in. It would give more buying power toward agencies that have credible proof of successful campaigns. But, as we are living in a new technological era, our problems of the past have found semantic solutions.

Using simple in-house analytics like Google Analytics or Microsoft Excel mainly consist of one or two employees within your company that would might meet your performance measurements but, will require more time spending and will lack competitive edge.

Slightly more advanced, but still project-based analytics will continue to cost more as your outsourced analytics companies may have higher buying power and you just may invest in whatever your agent declares is best.

Highly advanced analytics with omnichannel view performance enhancements and enterprise-based market solutions are slowly beginning to scale the competition as these companies start utilizing artificial intelligence (AI) to calculate a more precise marketing insights from online and offline data. Finding these AI-based marketing analytic companies will be as rewarding as finding a diamond in the rough.

So where do you think your company stands?

As important as profitability and efficiency may be, the underlying influence that changes a company down to its minute decimal is communication. The vertical silos that implement strategies based on valued activities, then positioned to fit the overall investment objectives generate a smooth productive flow that interrelate horizontally into action.

However, the results of its potential success can be roughly thawed out with estimates and averages. These metrics have been accurate and served its purpose for you for quite some time, but let’s face it, it’s time for an upgrade.

Where to start and what to do

Beginning with evaluating your KPIs and asking yourself: “is there room for optimization” already gives you a head start as most do not search for profitability from within their company, but from outside sales.

  1. As most successful companies run on AI-based software nowadays, it still stands to reason that a large percentage of the market still struggle because of out-dated software. Discover the trending KPIs that carry strong brand equity and baseline-lift.
  2. Pursue these entities that explore in-house optimization alongside the uniqueness of each one, preferably what they can offer. It would be optimal to have a company that accurately measures your marketing assets and maintains your CRM for strong customer equity.
  4. With the list of companies that are entitled to benefit you more (i.e. offer more long-term services and/or products), validate your choice by price-value equations with advantages of continuous growth.
  6. Would out-sourced project-based work favor over long-term exponential optimization and improvement?
  8. Alongside the search for more permanent solutions, is the potential company you are going to work with worth it? With their forecasts of long-term baseline sales growth, does this company have a clear mission that shines through its customer equity? Extend your interest, invite the possibility of being a consumer and let first impressions matter. Think pragmatically and let your buyer’s transparency speak for itself.

According to what solutions are goal-oriented, determine the most important metrics in calculating ROMI and have them as the source for every formula.

Want to know how much money you can earn?

Taking the first steps forward will lead you on a trajectory toward sureness that your company is doing well and no investments are being ill-managed, nor will your decision allow sales numbers to be hidden and buried in disorder.

The most up-to-date software on the market solves problems you never thought you had. This AI-powered software employs machine learning from all online data and offline data down to the last receipt, revealing how much ROMI is being earned and by what channel while simultaneously exposing forecast sales actual sales in real-time.

Continuous growth and maximum service should be top priority that every company strives for, whether you are a customer or buyer because of reputable power to push your company forthright into a leading market.

Juha Hurstinen

Topics: data analytics, marketing roi, marketing analytics, online and offline data, roi, romi


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