What does ROI stand for?

• A. Return on Investment
• B. Rate of Interest
• C. Revenue on Investment
• D. Return on Intention

Answer: (A)

ROI stands for Return on Investment, a way to measure how profitable an investment is by comparing the gains it delivers to what was spent. In marketing analytics, you use ROI to decide whether a campaign or tactic is worth the money by showing how much net profit the investment produced relative to its cost. The standard calculation is ROI = (net profit from the investment) / (cost of the investment), often shown as a percentage. For example, if a campaign costs $5,000 and generates $2,000 in net profit, the ROI is 40%. This helps you compare different options and prioritize the ones that yield the most efficient use of resources. Keep in mind ROI doesn’t account for the time value of money or risk, so it’s useful to pair it with other measures like NPV or payback when making larger decisions. The other terms aren’t correct: Rate of Interest refers to borrowing costs, Revenue on Investment isn’t a standard metric, and Return on Intention isn’t a recognized financial measure.