ROI · return on investment
ROI measures what an investment returns in profit once all costs are counted: budget, tools, time spent. Unlike ROAS, which compares revenue to ad spend alone, ROI reasons in net profit and full cost.
The formula
ROI = (Gain − Total cost) ÷ Total cost
A concrete example
Example
A campaign costs $7,500 all-in (budget, agency, time) and generates $12,000 of margin: ROI = (12,000 − 7,500) ÷ 7,500 = 60%.
Why it matters
ROI is the language of leadership: it compares investments of different natures (a campaign, a tool, a hire, an automation) on the same basis. A channel can have a good ROAS and a bad ROI if its management cost is high.
Frequently asked questions
- ROI or ROAS, which should I track?
- Both, at different levels: ROAS to steer campaigns week by week, ROI to decide where to invest at the quarterly scale. ROAS is a media metric, ROI an overall profitability metric.
- Should time spent count as a cost?
- Yes, otherwise the ROI lies. A "free" action that takes two days a month really costs the loaded salary of those two days. It is often what separates two seemingly equivalent options.