After you have learned how to analyze your campaign, we also want to show you an easy way of measuring the profitability: the so-called “Return on Investment” or “ROI“.
The ROI is a parameter that helps you to determine, whether or not you have gained money with your ad. It indicates the ratio between the sales profit and your invested capital.
How to calculate the ROI:
We will explain you the calculation with the help of an example:
The Shirtee expert Max Mustermann has made a profit of 1000 € with his campaign. Since shirtee.de didn’t cost him anything, he only needs to state the money he invested in advertisement as issued capital. With issued capital of 250 €, the ROI is calculated as follows:
The ROI is 400 %. This means that Max has gained 4 Euro for every Euro he invested. A rewarding investment.
Basically, there are only 4 different cases that can occur:
This is the best possible case. We recommend slightly increasing your advertisement budget in order to maximize your profit.
But: Keep an eye on your ROI. The figures can change quickly and if that happens you need to take the appropriate countermeasures immediately.
If the ROI is only slightly positive, you pay too much to reach your customers. Although you don’t lose money yet, this can change quickly.
Consider discontinuing your ad for a while and watch how your campaign progresses in the next few hours. If the ROI rises, increase your budget. If it declines, take down your ad and adjust the settings of your target group.
Das bedeutet, dass du nicht nur keine Abschlüsse hast sondern auch, dass deine eingestellte Zielgruppe nicht auf deine Anzeige reagiert. Stoppe deine Werbung. Außerdem solltest du dir überlegen entweder eine neue Nische zu finden, oder dein T-Shirt Design zu verbessern.
You have selected the right target group, which is also very interested in your product. However, the final touch to your design might be missing or the product price is too high. Improve your design and maybe adjust your price.
Now you know a very important parameter of your campaign, the ROI. Keep calculating the ROI while continuously analyzing your ad. React to changes early, but don’t rush it.