Problem
If the revenue attributable to a ski shop's radio ad is $\$ 30,000$, the cost to develop and play the ad is $\$ 8,000$, and the contribution margin typically averages $70 \%$, what is the ROMI? $162.5 \%$. $357 \%$ $213 \%$. $54 \%$. $182.5 \%$
Solution
Step 1 ：Given that the revenue attributable to a ski shop's radio ad is $30,000.
Step 2 ：The cost to develop and play the ad is $8,000.
Step 3 ：The contribution margin typically averages 70%.
Step 4 ：First, calculate the net revenue by multiplying the revenue by the contribution margin. In this case, the net revenue is $30,000 * 0.7 = $21,000.
Step 5 ：Then, calculate the Return on Marketing Investment (ROMI) by dividing the net revenue by the cost and multiplying by 100. In this case, the ROMI is \((\$21,000 / \$8,000) * 100 = 262.5\%\).
Step 6 ：Final Answer: The ROMI is \(\boxed{262.5 \%}\).
