Geofencing ROI Calculator & Formula

Explanation

Return on Investment (ROI) for geofencing campaigns measures the profitability of your geofencing marketing efforts. Geofencing involves creating virtual boundaries around a specific geographic area and targeting customers who enter or exit this area with specific advertisements or promotions. The ROI is calculated by dividing the net profit (revenue minus cost) by the cost of the investment and multiplying by 100 to get a percentage.

Real-Life Example

Let’s say you have spent $5,000 on a geofencing campaign and generated $20,000 in revenue from customers who were targeted by this campaign. To calculate the ROI, you would use the formula:

ROI = ((Revenue – Cost) / Cost) × 100

Substitute the values into the formula:

ROI = (($20,000 – $5,000) / $5,000) × 100 = 300%

This means the ROI for the geofencing campaign is 300%, indicating a highly profitable marketing strategy.

Benchmark Indicators

Understanding ROI benchmarks is crucial for evaluating the efficiency of your geofencing campaigns. Different industries have varying standards for ROI, and knowing these can help you set realistic goals and optimize your ad spend:

• Retail: A ROI of 200% – 300% is generally considered good.
• Technology: ROIs typically range from 250% – 400%, reflecting higher transaction values.
• Hospitality: ROIs of 150% – 250% are common, reflecting the competitive nature of the industry.
• Healthcare: A ROI of 150% – 300% is often the target.