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What Is ROI?

Return on investment (ROI) is the profit made from the advertising money you spent. At a super basic level, if you spend $5,000 on search engine advertising and generate $15,000 in new sales, that's a darn good return on your advertising dollars, right? Your ultimate goal, however, is to increase the total volume of sales at the lowest cost per customer. Assessing a deeper level of profitability enables you to reallocate ad budgets and efforts across the search engines, your product line, and even the campaign components for each product.

Figuring out your ROI isn't hard. You'll need access to the following data for your analysis. (For simplicity's sake, I address the ROI of one product throughout this chapter. You'll likely sell multiple products, or possibly services.)


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