How Do You Calculate ROI?
Perhaps a better question is do you calculate the return on your investment in marketing initiatives? If so, which method do you use? Below, we offer a variety of formulas commonly used in the marketing industry.
Each of the three formulas begins with the gross profit or customer lifetime value of the initiative. From that number, you subtract the overall cost of the marketing investment (this can vary by definition), and divide the resulting figure by the same marketing investment number. Since ROI is generally measured as a percentage, you will multiply that number by 100. For example, if the gross profit was $15,000 on a marketing investment of $4,500, the ROI calculation would look like this:
$15,000 – $4,500 = $10,500 / $4,500 = 2.33 x 100 = 233% ROI
Basic Marketing ROI Formulas
1. Gross profit (GP) for units sold:
Gross Profit – Marketing Investment
Marketing Investment
2. Customer lifetime value (CLV) instead of gross profit:
Customer Lifetime Value – Marketing Investment
Marketing Investment
3. GP or CLV minus marketing investment and overhead:
Profit – Marketing Investment – Overhead Allocation – Incremental Expenses
Marketing Investment
For more information on how to calculate ROI, please email BroadBased CEO, Jan Korb.
We are very pleased to announce that Catherine “Cat” Norton has joined BroadBased in the role of bookkeeper. In addition to A/P and A/R Cat will execute other finance-related activities. Cat earned a bachelor of science degree in accounting at the University of Oklahoma and brings more than 20 years of experience to BroadBased. Welcome, Cat!
And in intern news, the BroadBased fall design internship has been awarded to Stefanie Joseph, a senior at the University of North Florida. Stefanie will graduate in December with a bachelor of science degree in communication and advertising. We look forward to making this last semester a memorable one for her. Welcome, Stefanie!
Please welcome
Another new face you may spot in our office is Katie Jo Howell, who joined BroadBased in August as a fall semester PR intern from Florida State University. A Jacksonville native and a member of the

In an August 2011
With all the conversation about online advertising, marketers would be remiss to not include print advertising in the marketing mix. According to the Publishers Information Bureau, total magazine advertising revenue for the first half of 2011 increased 4% versus the same period in 2010. This marks the fifth consecutive quarter that magazines have posted increases in both revenues and pages, a trend welcomed by many.
