ROI

$100 Ads Purchased = $100 Check from Affiliate Network

  • 0% ROI

    Votes: 381 87.4%

  • 100% ROI

    Votes: 55 12.6%
  • Total voters
    436
^^ Kudos to a good post. ROI in accounting terms really has no place in describing media buys in the first place. From an accounting perspective you have to take into account the time value of money based on the risk free rate of return of capital. But that concept is way over the heads of most in here I would guess.
 


i have always used the term ROAS (return on ad spend) makes sense in this industry & funner to say out loud
 
ThatAdultGuy is right on the money. Markup % is based on revenue not on cost. That means that an item that costs $1.00 and sells for $3.00 is not a 300% markup. It is a 67% markup and the cost complement is 33%. Markup is based on the retail (revenue) not the cost.
 
oogie1947 said:
ThatAdultGuy is right on the money. Markup % is based on revenue not on cost. That means that an item that costs $1.00 and sells for $3.00 is not a 300% markup. It is a 67% markup and the cost complement is 33%. Markup is based on the retail (revenue) not the cost.
Click to expand...
WTF?

$1 to $3 = 200% markup.

67% is your profit margin. It is the margin of your revenue which is profit.
 
It depends, ROI may stand for "Return on Investment" or "Return of Investment".

If it's "Return on Investment", then in your case it would be 0%.
If it's "Return of Investment", then in your case it would be 100%.
 
guerilla said:
Your profit margin is 50%. Your markup is 100%.
Click to expand...

Ah ha. Then you agree with Brad Sugar then.

That's what he use when computing profit margin. I used to think that my profit margin is 100%

As long as we know what we mean, we're fine. But things start going wrong when we communicate with others.
 
ThatAdultGuy said:
In fact - the term ROI is completely incorrect when talking about media buying. Buying media is not an investment - the traffic is not an asset. Buying traffic is an expense, in accounting terms it would be classified as an advertising expense or Cost-of-revenue expense.

You can analyze media buys and refer to 'ROI' as your gross profit margin expressed as a percent - but even then gross margin is based on Revenue. In this case, the revenue is $100 and the cost-of-revenue is $100, for a gross profit margin of $0 or 0%.
Click to expand...

True, it should really be called Return On (Capital) Investment. When you purchase advertising, it's an operational expenditure.
 
rawbones said:
1244476515643s.jpg
Click to expand...

-ROI and -Rep
 
Ok isn't it just easier to use 0% as a base? To me it's just easier to reference that any positive ROI equates to profit. So if my ROI is 50% I made 50% profit of my investment, its just more simple, makes more sense. Why on earth would you try to make it more complicated than it is?
 
teguh123 said:
That's true. Make a lot of money and fuck a lot of beautiful babes. There is no higher purpose in life.

I mean, can somebody tell me a single higher non metaphysical purpose in life?
Click to expand...
well, given the choice between a beautiful babe and pile of drugs with no chance of having both at the same time, i'd take the drugs. that would give me the most pleasure. to me, pleasure is the meaning of life.
 
Positive ROI means you are making money idiots. Even if its only 10%, you are still making $10 PROFIT for every $100 you spend on a campaign.

So for you slow fucks, especially you Rascagua. $100 cost = $110 REVENUE = 10% ROI

.
.
.
.
retard
 
The reason why people are confused is because in traditional sense ROI would assume you're keeping your money.

I invested $100 into a bank and now have $101 meaning I have 101%.

With us it's different because you're not saving the advertising cost, you're spending it.

Anything above the cost is ROI meaning that 100 spend - 100 earned = 0% roi.

Good night.
 
volknet said:
The reason why people are confused is because in traditional sense ROI would assume you're keeping your money.

I invested $100 into a bank and now have $101 meaning I have 101%.

With us it's different because you're not saving the advertising cost, you're spending it.

Anything above the cost is ROI meaning that 100 spend - 100 earned = 0% roi.

Good night.
Click to expand...

^ he wins
 
stroz said:
i have always used the term ROAS (return on ad spend) makes sense in this industry & funner to say out loud
Click to expand...
ROAS is the term that we in this business should be using. In the marketing world in general, ROAS is the metric that's used for cases of measuring return on advertising expenditures. ROI is often used interchangeably since it's a more common term, and frankly, each industry can adapt common terms to slight differences in their field.
 
You must log in or register to reply here.
Top Bottom