What is ROI?
Nicklas Segatz Mortensen · Growth Hacker · Fractional CMO · Meta Ads Nerd · 8 July 2026 · 3 min.
Definition
ROI (Return on Investment) is the net return on an investment divided by the investment's cost: (return − cost) / cost, expressed as a percentage.
Also called: ROI, Return on Investment, Return on investment
Sådan virker det
ROI (Return on Investment) måler afkastet af en investering i forhold til dens omkostning: (afkast − investering) / investering. Hvor ROAS kun ser på annonceomsætning, kan ROI rumme hele indsatsen — inkl. værktøjer, timer og bureau — og er derfor tættere på et reelt forretningsmål.
01ROI vs. ROAS
Where ROAS looks only at ad revenue per ad euro, ROI can hold the entire effort: ads, tools, hours, agency — and measures against the net return, not the revenue. Invest €13k and get €30k in contribution margin back, and ROI is 130% ((30,000 − 13,000) / 13,000).
That makes ROI a broader, more honest business goal than ROAS — but also a less precise one, because it depends on what you count in both the numerator and the denominator. Be consistent, or the number can mean anything.
02When ROI is the right measure
ROI is strongest for assessing a whole investment — a campaign, a tool, a hire — over a period where you can total up both cost and return. For day-to-day bid management, POAS and contribution margin are more operational, because they work at the order and product level.
Calculate ROI on profit (contribution margin), not revenue. Revenue ROI overstates the return just as much as revenue ROAS does, and leads to the same wrong decisions.
Frequently asked questions
What's the difference between ROI and ROAS?+
ROAS measures revenue per ad euro and looks only at ads. ROI measures net return against the total investment and can include all costs. ROI is a broader business goal; ROAS is a narrower channel metric.
Should ROI be calculated on revenue or profit?+
On profit (contribution margin). Revenue ROI ignores margin and costs and overstates the return — exactly the trap POAS fixes relative to ROAS.
Related terms
Glossary
What is ROAS?
ROAS (Return on Ad Spend) is the revenue generated by ads divided by ad spend. A ROAS of 4 means €4 in revenue for every ad euro — but says nothing about what you actually keep.
Read the entry →Glossary
What is POAS?
POAS (Profit on Ad Spend) is your gross profit divided by ad spend. Where ROAS measures revenue per ad euro, POAS measures what you actually keep — after cost of goods, shipping and fees.
Read the entry →Glossary
What is contribution margin?
Contribution margin is revenue minus the variable costs (cost of goods, shipping, fees, returns). It's the amount each order contributes toward covering fixed costs and creating profit.
Read the entry →
Nicklas Segatz Mortensen
Growth Hacker · Fractional CMO · Meta Ads Nerd at Oaksmond
Growth hacker and fractional CMO with 10+ years' experience and hundreds of millions in managed ad spend behind him. Background from larger Danish and international scale-ups, and from the agency world.
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