Chapter 03

Measuring ROMI

When looking at ROMI, the two key metrics to have in mind are the incremental net profit generated from the activity (the financial return), versus the cost of campaign (the investment). While measuring the cost of the activity is straightforward, measuring the incremental net profit requires deeper investigation.

Notes: IPA Databank suggests that when payback is assessed, the calculations are often flawed. This ROMI tool will try to remedy this situation. It’s aimed at anyone who wants to measure marketing payback in financial terms. It offers some simple, practical tips on how to measure the effects of your activity, and how to calculate the contribution to shareholder value. It won’t solve all your problems;this is a complicated area and there are no simple answers. But it should help you to avoid some of the obvious pitfalls.