Return on Marketing Investment, often abbreviated as ROMI, is a metric that measures the efficiency of a company’s marketing efforts. It originated in the 1990s and became widely recognized in the 2000s thanks to contributions from experts like Guy Powell, James Lenskold and Rex Briggs. ROMI is calculated using a specific formula, which takes into account incremental revenue, contribution margin, and marketing expenditure. There are two primary methods for calculating ROMI – short-term and long-term. The short-term approach focuses on immediate ventes[3] and profits, while the long-term takes into account intangible factors like brand awareness[2]. ROMI is especially crucial in marketing numérique[1], where data analytics can help precisely measure the return on marketing investments. However, it’s important to consider both short-term and long-term effects when evaluating ROMI, as focusing solely on immediate returns could overlook the importance of long-term incendie[4] building.
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Retour sur investissement marketing (ROMI) is the contribution to profit attributable to marketing (net of marketing spending), divided by the marketing 'invested' or risked. ROMI is not like the other 'return-on-investment' (ROI) metrics because marketing is not the same kind of investment. Instead of money that is 'tied' up in plants and inventories (often considered capital expenditure or CAPEX), marketing funds are typically 'risked'. Marketing spending is typically expensed in the current period (operational expenditure or OPEX).
The idea of measuring the market's response in terms of ventes and profits is not new, but terms such as marketing ROI and ROMI are used more frequently now than in past periods. Usually, marketing spending will be deemed justified if the ROMI is positive. In a survey of nearly 200 senior marketing managers, nearly half responded that they found the ROMI metric very useful.
The purpose of ROMI is to measure the degree to which spending on marketing contributes to profits. Marketers are under more and more pressure to "show a return" on their activities.