What is the difference between ROAS and ROI?

Adwords Return on Ad Spend

One metric that is largely used by marketers is Return On Ad Spend (ROAS). Unlike Return On Investment (ROI), ROAS isn’t a default metric in Adwords or Google Analytics. That’s why we just added the ROAS metric so you can complete your dashboard with this valuable piece of information.

What is the difference between ROAS and ROI?

While both ROAS and ROI metrics are similar, there is a little difference:

ROAS = (Revenue – Ad Cost) / Ad cost

ROI = (Revenue – Total cost) / Total cost

ROAS is calculated on ad spending only while ROI checks for the total operating costs (manpower, marketing, R&D, etc). For online marketers, ROAS is easier to work with.

!! Note that Google Analytics or Adwords ROI is the same thing as ROAS unless you uploaded extra operating cost !!

See how ROI is calculated in Google Analytics.

Both can be expressed as percentage (%) or money ($), depending on what gives more meaning to you.

» Create a dashboards using ROAS for Adwords or Google Analytics

Stéphane Stéphane Guérin

Stéphane has been working on business web projects for more than 15 years. After creating and selling numerous web marketing agencies and web apps, he founded DashThis in 2011. Want to be a guest writer on the DashThis blog? Drop us a line at marketing@dashthis.com!

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