ROI & ROAS
ROI (return on investment) and ROAS (return on ad spend) both measure whether marketing pays off. ROI compares profit to total cost across any activity; ROAS narrowly compares revenue to advertising spend. A 4:1 ROAS means $4 back for every $1 of ads.
Why it matters
They turn activity into accountability — separating channels that grow the business from ones that just look busy. ROAS is handy for judging ad campaigns quickly; ROI is the truer test because it accounts for all costs and profit, not just revenue.
Common misreading
Optimizing ROAS while ignoring ROI. A campaign can show a strong ROAS and still lose money once product, fulfilment, and overhead are counted. Revenue isn’t profit.
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