Margin Return on Marketing Investment (mROMI)
Last updated
Last updated
Margin return on marketing investment (mROMI) refers to the incremental profits created by marketing. Itβs an indicator that helps to measure the effectiveness of a marketing investment and/or evaluate the value of marketing budgets enabling easier marketing budget planning. Its equation can be seen below.
ROMI and mROMI are the key essential indicators that show you the global performance of your business at the highest level. mROMI can also be called "Profit ROI" because it's calculated with profit in the numerator.
Calculation:
mROMI = (gross profit - marketingInvestment - otherMarketingExpense ) / ( marketingInvestment + otherMarketingExpense )
Example: mROMI = ( 300 000 - 100 000 - 10 000 ) / ( 100 000 + 10 000) β 1,73
Unit: Number
mROMI = -1
You directly lost all of your investment, no profit has been generated.
mROMI is between -1 and 0
Your return was lower than your Marketing Investment.
mROMI = 0
Your direct return equals your Marketing Investment.
mROMI is higher then 0
Your Marketing Investment was efficient from a Profit point of view. Higher number means higher efficiency.