Marketing ROI
Synonyms: Return on marketing investment (ROMI)، Marketing return، Campaign ROI
Last updated: 2026-09-25
Short Definition
Marketing ROI is a financial metric that measures the additional profit generated by marketing activity relative to its cost, usually calculated as (profit attributed to marketing − marketing cost) ÷ marketing cost × 100%.
Overview
Legal Basis
No Saudi law regulates the marketing ROI metric itself, but the inputs to its calculation rest on specific laws: (1) the Real Estate Brokerage Law, Royal Decree No. M/130 dated 30/11/1443H, which sets the commission at 2.5% of the transaction value for a sale and of the first year's rent for a lease unless otherwise agreed in writing (Art. 14) and specifies when it becomes due (Art. 15); (2) the Value Added Tax Law, Royal Decree No. M/113 dated 2/11/1438H, under which 15% VAT applies to commissions and real estate services and is therefore excluded from revenue when calculating ROI; and (3) the Personal Data Protection Law, Royal Decree No. M/19 dated 9/2/1443H, which requires consent for processing data for marketing purposes, affecting tools used to track customer sources.
Practical Example
An office in Dammam spends SAR 12,000 on a two-month digital campaign and sells two properties through it for SAR 1,400,000 and SAR 1,000,000. The commission is 2.5% of each deal: 35,000 + 25,000 = SAR 60,000 before VAT (the SAR 9,000 of VAT is collected for ZATCA and is not revenue). The office pays its agents 40% of the commission (SAR 24,000), keeping SAR 36,000. ROI = (36,000 − 12,000) ÷ 12,000 = 200%. Calculated wrongly on the two properties' value (SAR 2,400,000), the result would be a meaningless inflated number, and calculated on gross commission without deducting agents' shares, it would show 400%.
Common Mistakes
- ✗Calculating ROI on the value of the property sold instead of the commission or actual profit margin.
- ✗Including VAT in revenue, although it is collected on behalf of the state.
- ✗Ignoring agents' shares and costs such as photography and licences when calculating the net profit attributed to a campaign.
- ✗Attributing the whole deal to the last channel the customer touched and ignoring the channels that first introduced the property.
- ✗Judging a campaign after a few days, whereas a real estate deal may take weeks or months to close.
International Differences
The ROI formula is universal; what differs is the revenue side: commission rates, who pays them and how they are taxed vary between markets. In Saudi Arabia the Brokerage Law sets a default 2.5% unless otherwise agreed in writing, while in other markets commission is left to agreement or local custom. Data protection laws in Europe and elsewhere also restrict tracking and attribution tools in ways similar to the Saudi rules.
