Return on investment - ROI Definition
The concept of return on investment ROI is not a complicated one. To reiterate, Return on investment ROI is the gain from any spending minus the cost of the investment divided by the cost. This calculation yields a percentage either gained or lost from your investment. This makes sense, right? Unfortunately, the advent of social media has made calculating ROI a little more complicated. Some people have attempted to circumvent the need to calculate the financial return from a social media program by creating different acronyms.
What is ROI
Return on Investment (ROI) We can also define it as a performance measure used to evaluate the efficiency of an investment or compare it,
ROI is trying to directly measure the amount of return on the investment and relative to the investment’s cost. To calculate ROI Return of investment, the benefit of the investment is divided by the cost of the investment. The result is expressed as a percentage ( % ) or with ratio.
We do not mean to insinuate that the people who have come up with these acronyms have sinister intent. We think those who have created the acronyms are simply attempting to help those who struggle to capture social media’s value to the organization. Unfortunately, senior executives are not likely to understand or even accept any variation on ROI. Your immediate boss might accept some alternatives, but in our experience, senior leaders recognize only ROI as a financial return on investment.