ROI Compendium by centreforebusiness

VIEWS: 87 PAGES: 9

									eb usiness

fi les       Return on
             Investment
                    (ROI)
                         Return On Investment (ROI) calculator compendium
The Issue

Calculating the return on investment (ROI) for any project is an essential activity when justifying or attempting to measure
the success of a particular initiative. Traditionally, this ‘return’ is manifest in the financial benefits derived from an
investment, and is defined in financial terms as:

“A measure of the net income a firm is able to earn with its total assets. Return on investment is calculated by dividing net
profits after taxes by total assets.”

Source: Resource Management Systems




Source: LoneWolfLibrarian
Whilst the definition is suitable for organisations as a whole, it is too specific for investments in ICT and technology, where
the returns can be less tangible.




A more modern interpretation of Return on Investment




Source: facilitator.org.uk
ROI and ICT-based projects


Today’s IT professionals and budget managers are also required to assess non-financial benefits when considering the ROI of
ICT projects. These non-financial benefits include, but are not limited to:

         Improved Customer Satisfaction
         Better Information/Data
         Streamlined Processes
         Greater Productivity
         Greater Access to Current/New Markets


These benefits can be summarised and simplified into two distinct groups, which can help to qualify projects where
measuring financial returns are more difficult:


                                                      1. Doing things better

                                                      2. Doing better things

Source: icthub.org.uk


This deviation from the traditional definition and the introduction of non-financial benefits or intangibles has made the
process of calculating ROI increasingly complex, with traditional calculations no longer appropriate for individual IT projects.
The answer

Thankfully, help in measuring Return on Investment for ICT projects is provided by the wealth of calculator tools developed
to measure specific technology and web-based activities. In this paper, The Centre for eBusiness summarises some of the
best ROI calculators for some of the most popular and difficult to measure initiatives.



The Centre for eBusiness recommends…ROI calculators for email marketing:


Email marketing heavyweights Lyris provide an easy to use tool to measure the effectiveness of campaigns both small and
large:
http://www.lyris.com/solutions/lyris-hq/email-marketing/roi-calculator/download/


A simple tool from ROI tracker that allows marketers to predict and track the Return on Investment of an email campaign.
http://www.roitracker.co.uk/roicalcemail.htm


Basic ROI calculator from SEO and Search Engine Marketing firm StepMiles.
http://www.stepmiles.com/email-ROI-calculator.htm


Calculator from SME Toolkit offering a nice sliding feature for both conversion and response rate.
http://www.smetoolkit.org/smetoolkit/en/content/en/2265/Email-Marketing-ROI-Calculator


More advanced ROI calculator that allows marketers to monitor the success of multi-channel marketing campaigns.
http://www.ioninteractive.com/use-cases/
The Centre for eBusiness recommends…ROI calculators for Social Media:


Comprehensive tool that measures the success of social media activities and considers additional factors such as staff
training and PR value.
http://www.dragonsearchmarketing.com/online-marketing-strategy/social-media-marketing/social-media-roi-calculator


Great calculator from FrogLoop which helps calculate less-tangible factors including ‘number of friends secured’ and ‘cost per
friend’.
http://www.frogloop.com/social-network-calculator


Excel-based ROI calculator for social media campaigns from Care2.com which focuses on not-for-profit campaigns.
http://66.102.9.132/search?q=cache:hF41yTbnT1gJ:socialmediametrics.wikispaces.com/file/view/social-network-ROI-
calculator.xls+ROI+calculator+for+social+media&cd=15&hl=en&ct=clnk&gl=uk


Social Networking ROI framework from Socialware Compass. Download required.
http://www1.socialware.com/ROICalculatorDownload.html


Calculate your social media buzz with this tool courtesy of Facebook.
http://www.facebook.com/pages/Social-Buzz-Media/74405961649?v=app_6009294086
The Centre for eBusiness recommends…ROI calculators for Pay-Per-Click (PPC) campaigns:


Yahoo’s very own ROI calculator specifically designed to measure the success of Pay-Per-Click campaigns.
http://searchmarketing.yahoo.com/calculator/roi.php


Strong visual calculator from WSI which features useful gages to help identify successes and failures.
http://wsib2bmarketing.com/ContactUs/ROICalculator.aspx


Simple PPC ROI calculator from fuelinteractive that looks at monthly spend, conversion rate and cost per click.
http://www.fuelinteractive.com/ppc-roi-calculator/


Calculator from PPCManagement – tool features ability to plot results onto graph
http://www.ppcmanagement.com/ppc_roi_calculator.htm

B-Plans ROI calculator for PPC – features code that allows calculator to be embedded into web page
http://www.bplans.com/business_calculators/ppc_roi.cfm
If you like this, you may also like other Centre for eBusiness Papers such as:

‘Social Media: Trends 2009 paper’                                ‘Social Media: Predictions 2010 paper’

‘Top Ten Google Ranking Factors paper’                          ‘eMarketing: Trends 2009 paper’

‘eMarketing: Predictions 2010 paper’
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