What Is ROI (Return on Investment) (Return on Investment)?
Return on Investment (ROI) is net profit from an investment as a percentage of what was invested. Unlike ROAS (revenue ÷ spend), ROI subtracts costs, so a 400% ROAS with 30% margin is only ~20% ROI.
Also known as: return on investment, marketing roi, roi formula, roi vs roas. This page answers "what is ROI (Return on Investment)", ROI (Return on Investment) formula,ROI (Return on Investment) calculation, and ROI (Return on Investment) benchmarks for Bangladesh and global performance marketing teams.
Formula
ROAS vs ROI
You spend $10K on ads, generate $40K attributed revenue (4× ROAS). COGS is 55%. Gross profit = $40K × 45% = $18K. After the $10K ad spend, net = $8K. ROI = 8,000 ÷ 10,000 × 100 = 80%. The 4× ROAS looks amazing; the 80% ROI is the honest number.
Why it matters
ROI is what the finance team and board understand. ROAS is what the ad buyer manages. Bridging the two is where growth teams earn credibility, pretending ROAS is profit is the fastest way to lose it.
Common mistakes
- 1.Treating ROAS as ROI. Costs the business real money.
- 2.Excluding COGS, agency, and tools from the denominator. Overstates ROI.
Put ROI (Return on Investment) to work
Free calculators
FAQs about ROI (Return on Investment)
ROI or ROAS?
ROAS to steer daily; ROI to make investment decisions. Never confuse them, one has your COGS included, one doesn't.
What is a healthy marketing ROI?
It depends on payback period and channel. Direct-response paid media targeting 30 to 80% ROI in-month is normal; brand and top-of-funnel channels can look negative in-month and still print positive ROI over a 6 to 12 month window as later purchases arrive.
Related terms
Revenue attributed to ads ÷ ad spend, the fastest efficiency read.
Total marketing + sales spend divided by new customers acquired.
Lifetime value ÷ acquisition cost, the unit-economics gate for scaling.
Total revenue ÷ total ad spend, the blended, attribution-free ROAS.
Ad spend divided by conversions, the price of one action.