Measuring Your Marketing Success: ROI and ROAS in Digital Marketing

Boost your Digital Marketing ROI and ROAS and discover the benefits of measuring these metrics

We are currently in the new digital era, where online competition is becoming increasingly intense and companies that do not invest in digital marketing run the risk of falling behind and missing out on opportunities for success and growth. Knowing how to invest in Digital Marketing strategies and not dying in the attempt has become a necessity.

Performance Marketing is a type of Digital Marketing focused on measuring the performance of advertising campaigns. 

This type of digital marketing will help you measure if your investment has a return, loss or gain, using metrics such as ROI and ROAS. Learn everything you need to know about these two metrics to ensure success in your digital advertising.

Unit Economics in Performance Marketing

To understand its importance, we must first talk about the concept of unit economics. This term refers to the relationship between costs and unit revenues in a company. In Performance Marketing, companies seek to maximize their unit economics, which means they seek to maximize unit revenues and minimize unit costs. ROI and ROAS are metrics that help companies achieve this objective.

What is Return on Investment (ROI)?

Return on Investment, better known as ROI, is the indicator that will show you in a very simple way the benefit or loss obtained as a result of investing a budget in carrying out an advertising strategy. In other words, it is the amount of profit obtained after deducting investment costs. It can be expressed in percentage terms and can help determine the profitability of an investment.

What is Return on Ad Spend (ROAS)?

Return on Ad Spend, also known as ROAS, is the amount of revenue generated by an advertising campaign in relation to the investment made. It allows you to evaluate the performance of the investment in Marketing campaigns based on the amount of revenue the business generates for every dollar invested in advertising.

ROI vs ROAS: What’s the difference?

Both tools are important metrics in Digital Marketing, but they have different focuses and objectives. While ROI focuses on overall investment profitability, ROAS focuses on the effectiveness of a specific advertising campaign. Both metrics can be useful for making informed decisions about budget allocation and adjusting marketing strategies accordingly.

How are they calculated?

01.
Calculate ROI Online

ROI is calculated by dividing the profit earned by the investment made and multiplying the result by 100. That is, ROI = (Profit – Investment) / Investment x 100. The result is expressed as a percentage and is used to measure the effectiveness of a marketing strategy. If the result is positive, it means that the strategy has been profitable, while if it is negative, it indicates that there has been a loss.

02.
Calculate ROAS online

ROAS is calculated by dividing the revenue generated by the advertising campaign by the advertising investment cost and multiplying the result by 100. That is, ROAS = Generated Income / Advertising Investment Cost x 100. The result is expressed as a percentage and is used to measure the profitability of an advertising campaign. If the result is above 100%, it means that the advertising campaign has been profitable and has generated profits, while if it is below 100%, it indicates that there have been losses.

Free online ROI and ROAS calculator

At Performly, we offer an ROI / ROAS calculator that will help you quickly assess the performance of your digital marketing investment.

Improve your business’s profitability with Performance Marketing strategies

Develop your digital marketing plan with experts and get the maximum profitability for your business with strategies to increase your sales. We are the Performance Agency you need to grow your brand. Let’s talk about your next digital strategy!

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