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ROI stands for return on investment. It refers to the actual gain you receive from your investment on a particular marketing campaign and is relative to the cost of the investment.
ROI is calculated by dividing the benefit of an investment by the cost of an investment. The result is a percentage.
The formula is simple:
ROI = (Gain of investment – Cost of investment) / (Cost of investment)
ROI remains a favorite measurement because it is simple to calculate and easy to understand. It is essentially a way to measure whether an investment is profitable.
When applied to mobile marketing, ROI can be used to compare the profitability of your campaigns so you can decide which campaigns to keep and which to discard.