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Lesson 2 Vocab 45 - Return on Investment, ROI

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As an entrepreneur I expect you monitor all your advertising expenses. It is important to know how much profit is realized as a result of your advertising spending. This profit is your Return on Investment, or ROI.

I have heard many advertising companies claim that you need to continually flood your message out to the population. This is an especially common claim from magazines, newspapers, radio stations and TV stations. Of course a continual flood of your message translates into a deluge of spent money.

I've heard several advertising agencies state that a 2% response for direct mailings is a great return.

Lucky for you that you are now embarking into the era of new media advertising, where the cost of advertising is much lower and the ROI is much greater.

Once you learn the proper internet marketing skills, you will be able to select the best ways to spend your advertising dollars. Internet tracking will tell you within days, sometimes even minutes, if your advertising spending is working. If it doesn't work, just move on to the next idea tomorrow.

You will learn how to calculate your ROI as you learn how to read your general website stats and Analytics reports. I've seen several jewelry stores cancel their radio and TV ads in favor of much less expensive internet advertising which yielded a 638% ROI.




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AT: 01/22/2010 03:12:58 PM   LINK TO THIS ARTICLE
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