What was the Return on Investment (ROI) for an affiliate marketing service that spent $1,000 on advertising and made $1,200 in sales?

To determine the Return on Investment (ROI) for the affiliate marketing service, you can use the formula for ROI:

[ \text{ROI} = \frac{\text{Net Profit}}{\text{Cost of Investment}} \times 100 ]

In this scenario, the total revenue generated from sales is $1,200, and the advertising cost (investment) is $1,000. First, calculate the net profit:

[ \text{Net Profit} = \text{Sales} - \text{Cost of Investment} ]

[ \text{Net Profit} = 1,200 - 1,000 = 200 ]

Now, plug the net profit into the ROI formula:

[ \text{ROI} = \frac{200}{1,000} \times 100 ]

Calculating that gives:

[ \text{ROI} = 0.20 \times 100 = 20% ]

Thus, the calculation shows that the ROI for the affiliate marketing service is 20%. This percentage reflects how much profit was made relative to the amount spent on advertising, providing a clear measure of the effectiveness of the investment. This understanding is vital for evaluating the financial performance of marketing strategies.