How much of investment is right for the businesses to spend on their Advertisements?
This is always a question mark for the advertisers. Well, there is a limit considering the capacity of a business, their products, their revenue, their profits, their geographical location etc.
Before getting deeper into this I would like chalk down a few facts related to Shares of Media Across Major Channels. It reveals the fact that after the fairly underwhelming ad growth of 2006, perhaps the least sensational way to describe 2007 would be to say that it was a year of transition.
To start with, a business that plans to invest on any of the media listed above should know their
target audience.
Further more, it is better to know how to calculate ROI (return on investement) as it is probably the most important calculation one needs to make to ensure the long-term viability of their business. To track with proficiency the amount of dollars being invested into gaining sales and how much ROI those dollars put back into the business.
Most of the ad spenders beleive that "calculating an accurate return on investment is not an easy thing to do."
Here is the basic formula to calculate the return on investment (ROI):
ROI = [(Payback - Investment)/Investment)] x 100
Wherein, payback is the total amount of money earned from investment by a given company. Whereas, the investment is in terms of "resources" such as cash money, human resources or time among others.
ROI calculations should be done on both monthly and yearly basis.
