What is difference between ROAS and ROI?

ROAS = ROAS or Return on Advertising Spends is the ratio of the revenue generated by paid marketing and the spends for paid marketing. If this ratio is greater than one than the paid marketing efforts are yielding profits. RoAS does not take into account the profit margins for the investment.

ROI = Return on Investment is a broader term which is defined as the ratio of the profits and the investment in the endeavor. Since the ROI uses profit as a factor, this will render ROI negative in case the endeavor incurs losses.

Example – If INR 200 was invested in paid marketing and the revenue generated through transactions is INR 400. Then the RoAS is 2 and the ROI is 1 (as the overall profit is 200)

Updated on April 30, 2018

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