Essential for evaluating marketing initiatives: MROI (return on investment)

Update date:2025.12.01 Column

Many companies that are said to be successful in marketing are speedy in implementing the PDCA cycle.Properly evaluate the effectiveness of measuresIt is very important to take steps to improve your marketing strategy and make meticulous improvements. However, as social media develops and customer behavior becomes more diverse, it is becoming more difficult to measure the effectiveness of the measures. Marketing ROI is one indicator used to compare the effectiveness of various marketing measures implemented for different purposes, such as raising awareness, harvesting, and acquiring repeat customers. In this article, we will introduce basic information about marketing ROI, as well as the background to why marketing ROI has become so important and how to use it.

table of contents

First of all, what is ROI?
Why Marketing ROI (MROI) is Important
Key points for utilizing Marketing ROI (MROI)
- Promotional budget allocation and simulation
- Proper profit setting
Summary

First of all, what is ROI?

ROI stands for Return on Investment, and can be translated as the return on investment or return on invested capital. It is an indicator of how much profit you have made from your investment, in other words, the cost-effectiveness. It has become an essential perspective in modern business.

ROI (%) = (profit amount/investment amount)*100

The higher the figure, the more cost-effective it is, and anything less than 100% means that the investment has not been recouped. To improve ROI, it is important to analyze whether you need to reduce your investment or increase your sales.

In particular, marketing ROI refers to the amount of profit gained from the costs incurred in marketing, in other words, the "cost-effectiveness of marketing activities."

Why Marketing ROI (MROI) is Important

It has been said that it is difficult to measure the effectiveness of marketing measures because the measure is the degree of impact on customer psychology. Furthermore, in recent years, in addition to offline media such as television and flyers, online media such as SNS have developed, and as customer behavior becomes more diverse, the media in which marketing measures are implemented is also diversifying. As more companies are focusing on marketing activities, they are implementing various measures in various media, spending large amounts of money without fully understanding the effectiveness.

However, due to the effects of the recession following the Lehman Shock, there has been an increased need in the marketing field to "focus on measures that can be effective with a low budget and reduce promotional expenses" and "implement more effective measures without increasing investment," so measuring/evaluating the effectiveness of measures using marketing ROI has become important.

Key points for utilizing Marketing ROI (MROI)

Promotional budget allocation and simulation

Many people worry every year about how much budget to allocate to each campaign. In fact, I have heard that the calculations are made based on the experience and intuition of the person in charge. By comparing campaigns based on marketing ROI, you can make logical decisions about which campaigns to allocate your limited budget to. You can also simulate the promotional budget required to achieve your profit goals by calculating backwards.Budget allocation based on marketing ROIBudget simulations are also useful as persuasive materials when making internal proposals.

Proper profit setting

The key to calculating marketing ROI is what you consider to be “profit.” ROI can vary greatly depending on what you set as profit.

For example, if you define "profit" as increasing sales in the short term, you might conclude that a TV commercial that contributes to raising awareness but does not lead to purchases has a low ROI and should be discontinued. However, if you define "profit" as medium- to long-term brand development, you would conclude that the ROI of a TV commercial is high if the target audience who watched the TV commercial built a brand image that led to purchases several years later.

It is important to set appropriate profits and then calculate marketing ROI.

Summary

Marketing ROI is an index for measuring the cost-effectiveness of marketing measures. As it is now possible to obtain a lot of data, especially from online media, it will become even more important in the future. Why not make good use of marketing ROI and consider further optimizing your marketing measures?