General

ROI — Return on Investment

A measure of the profit generated relative to the total investment made.

Definition

Return on Investment (ROI) is a fundamental business metric that measures the net profit generated from an investment relative to its cost. In marketing, ROI takes a broader view than ROAS — it accounts for all costs including ad spend, creative production, agency fees, and cost of goods sold. A positive ROI means your investment returned more than it cost. Marketing ROI is typically expressed as a percentage. Unlike ROAS, which focuses purely on ad spend vs. revenue, ROI tells you whether your marketing activity is truly profitable after all expenses.

Formula

ROI = (Net Profit ÷ Total Investment) × 100%

Subtract total costs from revenue to get net profit, then divide by total investment and multiply by 100.

Example

You invest $10,000 in a campaign (including ad spend + creative). It generates $30,000 in revenue with $15,000 in COGS. Net profit = $30,000 – $15,000 – $10,000 = $5,000. ROI = ($5,000 ÷ $10,000) × 100% = 50%.

Key Points

ROI above 0% means the investment was profitable
ROI accounts for all costs, while ROAS only measures ad spend vs. revenue
Marketing ROI is harder to measure because attribution is complex
Longer attribution windows improve ROI accuracy for products with long purchase cycles