Return on Investment (ROI)

Return on Investment (ROI) is a financial metric used to evaluate the profitability or efficiency of an investment relative to its cost. In marketing and advertising, ROI measures the profit generated by a marketing Campaign or activity compared to the total amount invested in it. The basic formula is:

ROI = ((Net Profit from Investment - Cost of Investment) / Cost of Investment) * 100%

ROI helps businesses determine which marketing initiatives are providing the best returns and make informed decisions about budget allocation. Return on Ad Spend (ROAS) is a specific type of ROI that focuses only on advertising costs.