What is ROI in Digital Marketing and How Much ROI is Good?

What is ROI in Digital Marketing?

ROI stands for Return on Investment. It’s a way to measure how much profit you made from your marketing efforts compared to how much you spent.

In simple words:

“If you spend money on marketing, ROI tells you if that money brought in more money.”

How is ROI Calculated?

Here’s a basic formula:

ROI = (Net Profit from Marketing – Marketing Cost) / Marketing Cost × 100

For example:

If you spent ₹10,000 on a Facebook ad and earned ₹30,000 in sales from it, your ROI would be:

👉 (30,000 – 10,000) / 10,000 × 100 = 200% ROI

That means you made 2 times the money you invested!

How Much ROI is Considered Good in Digital Marketing?

This depends on your industry, product, and marketing goals. But generally:

• 100% ROI means you doubled your money – that’s a good result.
• 300-500% ROI is excellent – it shows your campaign is highly effective.
• Below 100% might mean your strategy needs improvement.

For example:

• E-commerce businesses often aim for 200-300% ROI.
• Service-based businesses may target even higher, especially with low marketing costs.

Why is ROI Important?

Because ROI shows whether your digital marketing is working or not. Without tracking ROI, you’re just guessing.

It helps you:

• Understand what’s working
• Cut off what’s not
• Make better budget decisions
• Grow your business smarter

Final Thoughts

ROI in digital marketing isn’t just a fancy term — it’s your scorecard. It tells you if your money is being well spent. Whether you're running ads, creating content, or building SEO, always keep an eye on your ROI.