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ROI

Definition and Example

ROI is return on investment, a metric that compares the profit or value generated by an activity against its cost.

Example of ROI

Example: If a campaign costs $5,000 and produces $20,000 in attributable gross profit, the ROI is (($20,000 – $5,000) ÷ $5,000) × 100 = 300%. That number gives leadership a cleaner view of profitability than traffic or leads alone.

Why ROI matters

It matters because strategy keeps channels from competing with each other. When this concept is clearly defined, the team can connect budget, audience, creative, offer, tracking, and reporting to revenue instead of chasing disconnected metrics.

Related terms

Frequently Asked Question

What does ROI mean?

ROI means return on investment, a metric that compares the profit or value generated by an activity against its cost.