Understanding Marketing ROI & ROAS
Return on Investment (ROI) and Return on Ad Spend (ROAS) are essential financial performance metrics used by marketers to measure advertising efficiency and business profitability.
Key Formulas
- ROI (%) =
((Total Revenue - Total Cost) / Total Cost) × 100 - ROAS (%) =
(Total Revenue / Total Cost) × 100 - ROAS Multiplier =
Total Revenue / Total Cost(e.g., 2.50x) - Net Profit =
Total Revenue - Total Cost - Break-Even Point = Total revenue required to cover ad spend and overheads without loss.