ROI (return on investment)
A measure of the gain or loss from an investment relative to its cost, usually shown as a percentage.
Definition
Return on investment compares what you earned with what you spent. If an investment of one hundred returns a net gain of twenty, ROI is twenty percent. In marketing it is tempting to use revenue instead of profit, which overstates the result, so be clear about what is counted: gross revenue, margin, and which costs. ROI can also take time to appear, so choose a period that fits your sales cycle. It is related to but different from ROAS, which measures revenue against ad spend only.
In a sentence
The finance team calculated ROI using gross margin, not revenue.
Long sales cycles delayed the campaign's measurable ROI.
Common mix-up
ROI includes all costs and usually profit; ROAS compares revenue only against advertising spend.
