ROI and ROAS are often used in the same conversation, especially when businesses are reviewing paid advertising performance.
They are closely related, but they are not the same thing.
ROAS looks specifically at the revenue generated from advertising spend. ROI takes a wider view and asks whether the overall investment was worthwhile once the broader costs involved have been taken into account.
That distinction matters because a campaign can look strong inside Google Ads or Meta and still deliver a much weaker commercial return once agency fees, creative costs, software, staff time or delivery costs are included.
For marketing teams, finance teams and anyone responsible for deciding where budget should go next, understanding the difference helps avoid reporting a strong-looking number without understanding what it actually means.
What is ROAS?
ROAS stands for Return On Ad Spend.
It is used to measure how much revenue has been generated in relation to the amount spent on advertising.
The basic calculation is:
ROAS = Revenue generated from advertising ÷ Advertising spend
If a business spends £1,000 on advertising and attributes £5,000 of revenue to that activity, the ROAS is 5.
That can also be expressed as 500%.
In practical terms, the campaign generated £5 in revenue for every £1 spent on advertising.
ROAS is useful because it gives advertisers a focused view of how efficiently paid media is generating value. It is particularly common in platforms such as Google Ads, where conversion values can be tracked and used to assess campaign performance.
Google defines ROAS as total conversion value divided by total spend and also uses it within automated bidding strategies such as Target ROAS. You can read more in Google’s guidance on Target ROAS bidding. :contentReference[oaicite:0]{index=0}
What is ROI?
ROI stands for Return On Investment.
It takes a broader view of performance by looking at the return generated compared with the overall investment required to achieve it.
A simple marketing ROI calculation is:
ROI = (Return – Total investment) ÷ Total investment × 100
The important difference is that ROI is not limited to media spend.
If a campaign includes advertising costs, agency fees, creative production, software, staff time or other direct expenses, those costs can all form part of the wider investment being assessed.
Google describes ROI as the ratio of profit to costs and notes that the exact calculation depends on the goals of the campaign. Its own examples also include wider costs beyond advertising spend when assessing whether activity has generated a worthwhile return. Google’s ROI guidance provides a useful overview.
What is the main difference between ROI and ROAS?
The simplest way to think about it is this:
ROAS tells you how efficiently your advertising spend generated revenue.
ROI tells you whether the wider investment was worthwhile.
That is why both metrics can be useful at the same time.
ROAS is often most helpful when you are comparing advertising campaigns, audiences or channels. ROI becomes more useful when you want to understand the wider financial impact of the marketing activity.
Neither metric is automatically better than the other. They are answering different questions.
An example of ROI vs ROAS
Imagine a business runs a paid advertising campaign for one month.
It spends £2,000 on Google Ads and generates £10,000 in attributable revenue.
The ROAS is:
£10,000 ÷ £2,000 = 5
That means the campaign generated £5 in revenue for every £1 spent on advertising, or a ROAS of 500%.
On the face of it, that looks strong.
But now consider the wider costs involved in delivering the campaign.
The business also spent £1,000 on agency management, £600 on creative and landing page work, and £400 on other associated campaign costs.
The total investment is therefore £4,000.
Using a simple ROI calculation:
(£10,000 – £4,000) ÷ £4,000 × 100 = 150%
The same campaign therefore has a ROAS of 500% and an ROI of 150%.
Both figures are correct.
They are just measuring different things.
Why ROAS can look stronger than the wider result
ROAS is useful because it is simple.
That simplicity is also its limitation.
If you only compare attributed revenue with media spend, you can easily overlook the wider costs required to make the campaign happen.
For an ecommerce business, that might include product costs, fulfilment, returns and discounts. For a service-based organisation, it could include staff time, creative production, sales resource or the cost of delivering the service itself.
That is why a strong ROAS does not automatically mean a campaign was highly profitable.
A campaign might generate a 500% ROAS and still produce a relatively modest profit once the wider costs are considered.
Marketing reporting becomes much more useful when those numbers are understood in context.
Does a high ROAS mean a campaign is profitable?
Not necessarily.
A high ROAS tells you that the revenue attributed to the advertising is high relative to the advertising spend.
It does not automatically tell you how much profit the organisation made.
Two businesses could both generate a ROAS of 4 and end up with very different commercial outcomes.
A high-margin consultancy service might retain a large proportion of the revenue it generates. A low-margin ecommerce product could have manufacturing, fulfilment and returns costs that significantly reduce the profit left behind.
The same ROAS can therefore mean very different things depending on the organisation.
This is why the more useful question is not simply:
“What ROAS did we achieve?”
It is:
“What did that return actually contribute to the organisation?”
When should you use ROAS?
ROAS is particularly useful when making advertising decisions.
If you are comparing two Google Ads campaigns, Meta audiences or paid media channels, ROAS can help show which is generating more revenue relative to the amount spent on advertising.
It can also be useful when budgets need to be adjusted.
If one campaign consistently generates much more conversion value per pound of media spend than another, there may be a strong case for shifting budget towards it, assuming the wider commercial context supports that decision.
This is why ROAS is commonly used within paid advertising.
It gives marketing teams a useful way to understand advertising efficiency.
But it should rarely be the only number used to judge success.
When should you use ROI?
ROI becomes more useful when you are asking a broader business question.
Was this activity worth the investment?
Should we continue funding it?
How does it compare with another use of the budget?
What happens once the wider campaign costs are included?
That makes ROI particularly useful for senior teams, finance teams, boards and anyone responsible for deciding how limited marketing budget should be allocated.
Google itself describes ROI as a key measure because it helps show the real effect advertising has on the business, rather than simply reporting clicks or impressions.
Our free Marketing ROI Calculator is designed around that wider view of performance. It allows organisations to look at ROI and ROAS alongside metrics such as cost per lead, customer acquisition cost and conversion rate.
Should agency fees be included in ROI?
If the aim is to understand the genuine return from a marketing activity, agency fees would normally form part of the investment.
The same applies to other direct costs such as freelancer fees, creative production, software or staff resource where those costs are part of delivering the campaign.
That does not mean every calculation needs to become overly complicated.
The level of detail should reflect the decision you are trying to make.
If you are deciding whether Campaign A or Campaign B should receive more Google Ads budget, ROAS may be enough.
If you are presenting the overall commercial performance of the campaign to a board or leadership team, including the wider investment gives a much more useful picture.
The most important thing is consistency.
If one campaign includes agency fees and another does not, comparing their ROI becomes misleading.
What about marketing that does not generate revenue immediately?
Not every marketing activity produces an immediate sale.
That makes ROI and ROAS more difficult to interpret in some situations.
A professional services lead might take several months to become a customer. SEO content can influence someone repeatedly before they eventually enquire. A school admissions campaign may affect a parent’s decision long before an application is submitted.
The same applies to charity marketing.
A supporter might first engage with an awareness campaign, later sign up to an event and eventually become a regular donor.
In these situations, a short reporting window can make valuable marketing look weaker than it really is.
Attribution matters.
The length of the decision-making journey matters.
Customer or supporter lifetime value matters.
The objective of the campaign matters.
That is why ROI should be interpreted rather than simply reported.
A percentage on its own rarely tells the whole story.
ROI and ROAS for charities
The distinction between ROI and ROAS can be particularly useful for charities because not every campaign is designed to generate direct fundraising income.
A Meta campaign might recruit volunteers.
Google Ads could help people find a support service.
An event campaign might generate registrations that lead to fundraising later.
A regular giving campaign may acquire supporters whose real value develops over several years.
Where a charity is running direct-response fundraising advertising, ROAS can still be useful if donation income can be attributed accurately to the media spend.
But a broader fundraising ROI calculation may also need to include agency fees, creative costs, staff resource, platform fees and other campaign expenses.
We explore that wider issue in our article on what a good fundraising ROI looks like.
Charities can also use our free Charity Fundraising Performance Calculator to look at fundraising income alongside the costs involved in generating it.
The important thing is not to force every charity marketing objective into a revenue-only measure.
Sometimes the valuable outcome is a donation.
Sometimes it is an application, registration, referral or new supporter relationship.
What is a good ROAS?
There is no universal ROAS that every organisation should aim for.
A ROAS of 4 might be excellent for one business and commercially unsustainable for another.
The answer depends on factors such as margin, product or service costs, average transaction value, repeat purchasing and customer lifetime value.
The campaign objective also matters.
A business acquiring new customers may be willing to accept a lower short-term ROAS if those customers are likely to purchase again. A remarketing campaign aimed at existing customers might reasonably be expected to achieve a much higher return.
This is why generic claims that every organisation should target a particular ROAS should be treated cautiously.
The right target starts with the economics of the organisation.
What is a good marketing ROI?
The same applies to ROI.
There is no percentage that automatically represents good marketing performance.
A positive ROI means the return exceeded the costs included in the calculation, but whether that return is strong enough depends on the organisation’s objectives and the alternatives available.
A campaign delivering a 20% ROI may technically be profitable, but if another reliable channel consistently delivers a much stronger return, that difference matters.
Equally, a campaign focused on acquiring new customers may deliberately operate at a lower short-term ROI if the organisation knows those customers create significantly more value over time.
The number is useful.
The context is what makes it meaningful.
ROAS can become a vanity metric too
Most marketers recognise that impressions, clicks and follower counts can become vanity metrics when they are reported without context.
ROAS can fall into the same trap.
A 900% ROAS sounds impressive.
But the figure still needs to be understood.
Which revenue was attributed to the campaign?
Were existing customers included?
Was the attribution window appropriate?
Were refunds taken into account?
Were the conversion values accurate?
Did the campaign generate incremental revenue, or would some of those customers have purchased anyway?
The bigger the decision being made from the figure, the more important those questions become.
Marketing measurement should help an organisation understand performance.
It should not simply produce the biggest number available for the monthly report.
ROI and ROAS work better together
There is no need to choose between ROI and ROAS.
In many cases, the strongest marketing reporting uses both.
ROAS can tell the marketing team how efficiently advertising spend is generating revenue.
ROI can give the wider organisation a better understanding of whether the activity is delivering a worthwhile overall return.
Those figures can then sit alongside other measures such as cost per lead, customer acquisition cost, conversion rate and customer lifetime value.
The objective is not to fill a dashboard with more metrics.
It is to use the right metrics to make better decisions.
Our Marketing ROI Calculator brings several of those measures together, giving organisations a practical way to look at campaign performance beyond a single number.
So, what is the difference between ROI and ROAS?
ROAS measures the revenue generated in relation to advertising spend.
ROI measures the return generated in relation to the wider investment.
ROAS is particularly useful for understanding advertising efficiency, while ROI gives you a broader view of whether the activity was financially worthwhile.
Both can be valuable.
The important thing is knowing which question you are trying to answer.
If you are deciding where to move the next £500 of Google Ads budget, ROAS may be particularly useful.
If you are deciding whether the campaign itself was worth the total amount invested in it, ROI is likely to tell you more.
At Blake Mark Productions, we support businesses and charities with paid advertising, marketing strategy and campaign measurement, helping organisations understand not only what their marketing generated, but how that activity contributes towards their wider objectives.
If you want to understand your own figures, you can use our free Marketing ROI Calculator to calculate ROI, ROAS and other useful performance metrics.