ROI Calculator
Calculate return on investment instantly
Understanding ROI in Advertising
What is ROI?
ROI (Return on Investment) measures the profitability of your advertising spend. It shows how much revenue you generate for every dollar spent on ads. A positive ROI means your campaign is profitable, while a negative ROI indicates you're losing money.
ROI vs ROAS: What's the Difference?
While ROI considers your actual profit (revenue minus all costs), ROAS (Return on Ad Spend) only looks at revenue divided by ad spend. ROAS is a simpler metric that doesn't account for product costs, shipping, or other expenses. Use both metrics together for a complete picture of your campaign performance.
Example Calculation
If you spend $1,000 on ads and generate $3,000 in revenue:
- Profit: $3,000 - $1,000 = $2,000
- ROI: ($3,000 - $1,000) / $1,000 = 200%
- ROAS: $3,000 / $1,000 = 3.0x
A good ROI varies by industry, but for e-commerce, an ROI above 100% (or 2x ROAS) is generally considered healthy after factoring in all costs.