What does ROMI mean and stand for?
ROMI Stands for Return on Marketing Investment. Similar to ROI (Return on Investment), Return On Marketing Investment (ROMI) takes a look at the returns a company can attribute to marketing and advertising functions.
This equation takes a look at net profit divided by total marketing expenses. A positive number here shows marketing is generating business. A negative number doesn’t necessarily show that business is not generated from marketing, but that it at least cannot be attributed to marketing.
This is commonly used as a benchmark in direct response advertising and is similar to ROAS (Return On Ad Spend). ROMI may also be referred to as ROMS (Return On Marketing Spend).
Methods of Measuring ROMI
There are two main methods of using and measuring Return on Marketing Investment: Short-term and Long-term. The short-term method uses simple metrics such as revenue, market share, contribution margin, etc. It is most effective in evaluating short-term marketing activities that can be measured through simple metrics to make important decisions. For example, measuring the ROMI of an email campaign could help a company determine if it wishes to continue with that marketing activity.
The second method, long-term ROMI, can be used to determine longer-term activity that is less tangible to measure. While this method is more difficult and abstract, many companies are learning to use it to determine where to best place investments and marketing resources.
Learn More with Corkboard Concepts
Understanding metrics like ROMI and how to use them to make decisions is important, but it can be difficult to know where to start. Now that we’ve answered your question, “What does ROMI mean?”, we can help you start making smart choices with your marketing resources! We have an experienced team ready to help your company gain brand awareness and raise ROMI. Contact us today to learn more!