| Today, an increasing number of marketers and | | | | metric. Fortunately, advancement of technology has |
| company executives see the need to determine | | | | paved way to the creation of various business |
| marketing ROI for their marketing investments. | | | | intelligence tools that make such a task more |
| Marketing Return of Investment (ROI) or Return on | | | | convenient. Moreover, the cost of these tools is no |
| Marketing Investment is a metric that would optimize | | | | longer as high as it once was. Affordable business |
| marketing spending both short and long-term. It is | | | | intelligent tools, in fact, are already widely available for |
| widely acknowledged that higher ROMI or ROI would | | | | small-scale business organizations to use. These tools |
| mean effectiveness of marketing strategy, increase in | | | | help company executives gain a more in-depth insight |
| revenue and improved market and profit share. There | | | | about how the target market and the customers |
| are two types of ROMI that can be used, short-term | | | | respond to the marketing activities launched. |
| ROMI and long-term ROMI. The first type is used as | | | | One of the primary reasons for the increasing use of |
| an index to measure revenue in terms of dollars, | | | | ROMI or marketing ROI is the need of company |
| contribution margin, and market share against every | | | | executives to know just where they need to allocate |
| dollar spent for marketing activities. | | | | their marketing and sales investments. For these |
| The determination of this type of ROMI is simple but it | | | | people, this metric helps them identify the boundaries |
| can be very useful in supporting decisions regarding | | | | of both marketing and sales. Moreover, this |
| the marketing mix. The long-term ROMI, on the other | | | | sophisticated measure also helps company executives |
| hand, can be used to assess certain intangible | | | | make decisions that would help them deal with tighter |
| concerns of marketing effectiveness like increased | | | | competition and slower industry growth as well as high |
| purchase intent and increased brand awareness. ROMI | | | | customer creation or acquisition costs. |
| is now used an important tool by some of the biggest | | | | With these new ROI business tools, it becomes easier |
| corporations worldwide in balancing business | | | | for company executives to provide marketing support |
| operations and marketing investments. For these | | | | where it is necessary. These tools function as |
| organizations, the ROMI metric is treated as a scientific | | | | scorecards that will quantify sales success through |
| basis of allocating budget and in making business | | | | marketing activities and investments. Aside from |
| priorities. The short-term ROMI, in particular, is used to | | | | tracking sales, marketing ROI tools can also be used to |
| identify and distinguish which investments are | | | | generate more excitement from the customer base |
| productive and which are unnecessary. Long-term | | | | as well as managers. One of the companies that have |
| ROMI, meanwhile, are commonly used by managers to | | | | gained much benefit from using the marketing ROI or |
| support strategic plans and future marketing | | | | ROMI metric is Microsoft Corporation. With the use of |
| investments. | | | | certain ROI tools, company executives were able to |
| Measuring ROI in marketing spending is not as easy as | | | | assess the efficiency of their marketing arm, the |
| it seems. For one, managers should be able to identify | | | | McCann Worldgroup. |
| which data or information is needed to compute this | | | | |