An affiliate marketing campaign cost $1,000 and generated $1,200 in sales. What was last month's ROI?

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Multiple Choice

An affiliate marketing campaign cost $1,000 and generated $1,200 in sales. What was last month's ROI?

Explanation:
ROI measures the profit earned for each dollar spent. Here, profit is revenue minus cost: 1,200 − 1,000 = 200. Then ROI is 200 divided by 1,000, times 100, which equals 20%. So last month’s ROI is 20%. Note how this differs from simply looking at sales or gross margin: ROI focuses on how efficiently the spend generated profit, not just total revenue. The other numbers come from different calculations (for example, revenue divided by cost would be 120%, not the profit-based ROI).

ROI measures the profit earned for each dollar spent. Here, profit is revenue minus cost: 1,200 − 1,000 = 200. Then ROI is 200 divided by 1,000, times 100, which equals 20%. So last month’s ROI is 20%.

Note how this differs from simply looking at sales or gross margin: ROI focuses on how efficiently the spend generated profit, not just total revenue. The other numbers come from different calculations (for example, revenue divided by cost would be 120%, not the profit-based ROI).

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