Two metrics that sound alike and mean very different things. Mixing them up is how "profitable" campaigns quietly lose money.
Revenue ÷ ad spend. A ROAS of 3× means every $1 of ads returned $3 of revenue. It measures the ad channel only — it ignores every other cost.
(Profit ÷ total cost) — it counts all costs: ad spend, tools, fees, refunds, your time. ROI is the number that tells you whether the business actually made money.
| Metric | Formula | Answers |
|---|---|---|
| ROAS | Revenue ÷ ad spend | Is the ad channel pulling its weight? |
| ROI | Profit ÷ total cost | Did I actually make money? |
A 3× ROAS looks great — until you add product cost, fees and refunds and discover your ROI is negative. Always optimise to ROAS for speed, but judge the business on ROI.
