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 added the ROAS metric, so that 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 a percentage (%) or currency ($), depending on what gives more meaning to you.