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Definition

Return on advertising investment

Return on advertising investment is the net return on advertising investment divided by the costs of the advertising investment.

Measuring advertising effectiveness and the return on advertising investment has become a hot issue for most companies, especially in the right economic environment. A less friendly economy “has obligated us all to pinch pennies all the more tightly and squeeze blood from a rock,” says one advertising executive. That leaves top management at many companies asking their marketing managers, “How do we know that we’re spending the right amount on advertising? And “What return fare we getting on our advertising investment?”

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