Source: WARC 2024ROI is the ratio of net profit generated by an investment. In marketing, it is often used to refer to incremental sales as well as profit.
The average campaign in the WARC database delivers a sales increase approximately four times as high as the advertising investment. An advertising investment of $1m would generate $4.34m of incremental sales.
The median profit ROI of campaigns has also grown steadily, from 1.9:1 in 2017 to 2.43:1 in 2023. Profit ROI differs from revenue ROI as it reflects the net profit generated by an advertising campaign, as opposed to total incremental sales or revenue.
Why ROI matters
Understanding ROI is important as it provides a basis for advertisers to evaluate the efficiency of their advertising spend. An upwards trend – as observed in WARC’s analysis – suggests an overall improvement in advertising efficiency.
Notably, since most case studies in the WARC database list short-term results, the ROI figures are more likely a reflection of short-term payback. The long-term return on investment will be higher as evidence suggests that more than half of marketing ROI is generated in the long term.
Takeaways
The median revenue ROI of successful campaigns is 4.34:1 and the median profit ROI is 2.43:1.
ROI can vary widely between campaigns and categories, with a short-term impact ranging from from less than 1:1 to more than 10:1.
The automotive sector shows high median revenue ROIs, while retail campaigns show high profit ROIs.
WARC Media subscribers can read the ROI Benchmark report in full here.
Source: warc.com
