ROI (Return on Investment) is a key performance indicator in traffic arbitration on Facebook. You need to count it correctly in order to understand which campaigns are profitable and which are losses. In this article, we will tell you how to correctly calculate the ROI in the arbitration of traffic on Facebook in the longrid format.
What is ROI?
ROI is an indicator that shows how much money you have earned for each dollar invested. It is calculated by the formula:
ROI = (income – costs) / costs * 100%
If the ROI is more than 100%, it means that the campaign is profitable. If the ROI is less than 100%, it means that the campaign is unprofitable.
How to correctly calculate ROI in traffic arbitration on Facebook?
In order to correctly calculate the ROI in Facebook traffic arbitration, the following factors must be taken into account:
1. Advertising costs
Advertising costs are all expenses related to the launch and support of an advertising campaign. They may include the following items:
- Expenses for the advertising budget\n- Expenses for the creation of advertising materials (texts, images, videos, etc.)\n- Expenses for setting up and optimizing an advertising campaign\n- Expenses for analytics and reporting
2. Income from the advertising campaign
The income from the advertising campaign is all the money you have earned thanks to this campaign. They may include the following items:
- Sales of goods or services\n- Conversions on the site (for example, subscription to a newsletter or registration)\n- Leads (for example, requests for consultation or callback)
3. Time period
The time period is the time period for which you count the ROI. It can be different depending on the goals of the campaign and the specifics of your business. For example, a week may be enough for a campaign to promote a new product, and a month or even a year may be enough for a campaign to increase customer loyalty.
Practical examples
Let's look at some examples to illustrate how to correctly calculate ROI in traffic arbitration on Facebook.
Example 1. Product promotion campaign
Let's say you have launched an advertising campaign to promote a new product. The cost of advertising was $1000. During the period of the week, you sold $2,000 worth of goods. Then the ROI is calculated as follows:
ROI = (2000 – 1000) / 1000 * 100% = 100%
This means that the campaign is profitable.
Example 2. Campaign to increase customer loyalty
Let's say you have launched an advertising campaign to increase customer loyalty. The cost of advertising was $5,000. During the month period, you have received 50 new loyal customers. Each of them brings you $100 a month. Then the ROI is calculated as follows:
ROI = (50 * 100 – 5000) / 5000 * 100% = 0%
This means that the campaign is not profitable.
Conclusions
Correct reading of ROI in traffic arbitration on Facebook is an important tool for understanding the effectiveness of advertising campaigns. It is necessary to take into account the cost of advertising, campaign revenue and the time period for which you consider ROI. We hope that our article will help you to correctly calculate ROI and make more informed decisions in the arbitration of traffic on Facebook.
