ROI is return on investment, a metric that compares the profit or value generated by an activity against its cost. A common calculation is: (Net profit ÷ investment cost) × 100.
It matters because strategy keeps channels from competing with each other. When this concept is clearly defined, the team can connect budget, audience, creative, offer, tracking, and reporting to revenue instead of chasing disconnected metrics.
Example
Example: If a campaign costs $5,000 and produces $20,000 in attributable gross profit, the ROI is (($20,000 – $5,000) ÷ $5,000) × 100 = 300%. That number gives leadership a cleaner view of profitability than traffic or leads alone.