Marketing Analytics: Return on Marketing Investment (ROMI) Veronica owns a luxury resort located on the island of Bora Bora, a 12-square-mile island in the western part of the Society Islands of French Polynesia. The resort is a major international tourist destination, famous for its aqua-centric luxury accommodations, hospitality, and plentiful coconut trees. Veronica was interested in determining the profit that her marketing campaigns are generating for her business, so she contacted a consulting firm in Los Angeles, CA, to help her. As a marketing graduate, you are selected to perform this task. You pack your bags and flew to Bora Bora Upon meeting with Veronica, you suggest that she might want to use Return on arketing Investment (ROMI) to find out how much profit each marketing campaign nerating. ROMI is a metric used in marketing to measure the productivity of a motional campaign. It is a subcategory of return on investment, as the expenses e are incurred on marketing. You also comment that by focusing on ROMI, ronica can help her shareholders move away from the idea that marketing is an expense that can be deducted when the economv is weak. Instead, it is an
Television Social Media Website Revenues Before campaign $12,000 $12,000 $12,000 Revenues After campaign 16000 30000 18000 1) Increase in Sales $4,000 $18,000 $6,000 Campaign Cost 3000 12000 5000 ROMI (4000-3000)/3000 (18000-12000)/12000 (6000-5000)/5000 2) ROMI 33.00 50.00 20.00 Normal Sales Growth Rate(%) 4000/12000 18000/12000 6000/12000 Normal Sales Growth Rate(%) 0.33 1.50 0.50 3) Net ROMI 33-6 = 27 50-6 = 44 20-6 = 14 4) The social media campaign was most profitable
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