Return on investment (known as ROI) is the ratio of the cost of advertising relative to the profit generated from conversions such as sales or leads. Your website ROI indicates the value to your business gained in return for the cost of your ad campaigns and Web Analytics can help you calculate your ROI it and then optimize it. ROI is calculated as:(Return – Investment) Investment
ROI is typically expressed as a percentage, so you should multiple your result by 100.
John Wanamaker, an entrepreneur from Philadelphia who built a department store empire in the late 19th and early 20th century once remarked, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Today this quote embodies the core of whats changed in online marketing as a result of Web Analytics. Now you no longer need to wonder which half of your marketing is working and which isn’t. Today both big and small business can measure the ROI of their websites using web analytics, and their off line marketing activities more effectively with simple and free website tools.