ROI (return on investment) tells you what percentage of profit each unit of money invested brought back after all costs. You calculate it as return minus cost, divided by cost, times 100. An ROI of 50% means €100 invested came back as €150. A negative ROI is a loss.
ROI (return on investment) tells you what percentage of profit each unit of money invested brought back after all costs. You calculate it as return minus cost, divided by cost, times 100. An ROI of 50% means €100 invested came back as €150. A negative ROI is a loss.
In marketing, ROI gets mixed up with ROAS. They differ in two ways. ROI works with profit, not revenue. And it counts everything you put into the channel, not just ad spend: agency fees, creative production, tools, your own team’s time.
In marketing ROI, the return is the gross margin on the sales the investment drove, not the revenue. Plug in revenue and you are really calculating ROAS minus 100, and the result comes out inflated.
| ROI | (return − cost) ÷ cost × 100 | Example: (€12,000 − €8,000) ÷ €8,000 × 100 = 50% |
| Marketing ROI | (gross profit − ad spend − other costs) ÷ (ad spend + other costs) × 100 | Example: €40,000 revenue at a 30% margin = €12,000; €7,000 ads + €1,000 management → 50% ROI |
| Break-even | ROI = 0% | The investment came back, nothing more |
ROI can be negative. An ROI of −20% means €100 came back as €80. ROAS can never go below zero, which is how it hides losses: 400% looks fine even for a store that is losing money on its ads.
Work out your marketing ROI from your own numbers. ROAS from the same inputs sits next to it, so you can see how far apart the two can be.
Positive ROI means the investment paid back. What counts as enough depends on time and risk: 20% ROI in a month is a different investment from 20% in a year. Compare channels over the same period and with the same set of costs.
ROI is the right tool for channel or project decisions: adding Meta Ads, paying for a new website, hiring an agency. For day-to-day campaign management it is too slow, because fixed costs do not move with every click. There, ROAS or POAS against break-even ROAS is enough.
What the profit view looks like in practice: for MyDeko our main yardstick is margin after ads, meaning revenue minus goods and ad spend. In March 2026 it was −25%, in September +37% (store back office). For stores with repeat purchases, calculate ROI over a longer window. A customer whose first order does not cover the ad cost may cover it with the second. CLV shows how much you can afford.
All four measure return. They differ in what goes into the numerator and which costs they count.
| Metric | Numerator | Costs counted | Break-even |
|---|---|---|---|
| ROI | gross profit minus all costs | ads, management, creative, tools | 0% |
| ROAS | revenue | ads only | 1 ÷ margin × 100 |
| POAS | gross profit | ads only | 100% |
| ACoS | ad spend (divided by revenue) | ads only | equals margin |
For ads alone, with no other costs: ROI = POAS − 100. A 120% POAS is a 20% ROI on ad spend. Add management and creative and ROI drops below that.
Metrics that show up in the same sentence as this one.
The most common error in marketing reports. ROI calculated from revenue is really ROAS minus 100 percentage points and says nothing about profit. A store with a 20% margin and a 400% ROAS would report a 300% ROI while its ads are losing money.
Campaign management, video production, tool licenses and your own team’s time all belong in ROI. On smaller accounts they make up a significant share of total cost and can flip a positive ROI to negative even when the ads alone clear break-even.
New campaigns spend their first weeks learning, and customers come back months later. A one-week ROI punishes investments that pay back more slowly. For channel decisions, use at least a quarter, and for repeat purchases, factor in customer value.
The percentage of profit each unit of money brought back after all costs. An ROI of 50% means €100 invested came back as €150.
(return − cost) ÷ cost × 100. In marketing, the return is the gross margin on the sales the investment drove, and the cost is everything you put into the channel: ads, management, creative, tools.
ROAS divides revenue by ad spend; ROI divides profit by all costs. A 400% ROAS at a 20% margin is a −20% ROI on ad spend, in other words a loss.
Any positive ROI means the investment paid back. Whether it is enough depends on how long the payback takes and what else you could do with the money. Compare channels over the same period.
Yes, a negative ROI is a loss. A −20% ROI turns €100 into €80. In advertising it happens when ROAS sits below break-even, or when fixed costs exceed the margin from sales.
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