What is ROI?
ROI stands for "return on investment".
ROI. Answers.com. Computer Desktop Encyclopedia, Computer Language Company Inc., 2007.
Why is this important?
Tracking your advertising dollars is the only way to know if you're making a profit! Sadly, most online entrepreneurs never take the time to do this.
How to calculate your "return on investment".
Use this equation:
Gain from investment minus Cost of investment divided by cost of investment equals Return(%) on investment.
EXAMPLE:
Your ad cost $100. You profited $1000. Your return on investment is 9%. A high percentage indicates a good return on investment. A lower percentage doesn't necessarily mean bad news. Maybe you got a lot of
prospects
who will buy later. Don't get too hung up with the numbers. But do track your ad campaigns and look for ways to improve them.
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