Marketing ROI
Profit attributable to marketing divided by its cost - the return on the spend, in margin terms. Stricter than ROAS, which counts revenue: a 3x ROAS on thin margins can be a negative ROI. Also structurally biased toward short-term, easily attributed activity, which is why optimising to it shrinks brand budgets.
Where it's used
Used in CFO conversations and budget reviews. Good because it looks at profit, not revenue. Use a window long enough to capture the brand effects.
How to calculate it
Marketing ROI = (Gross profit from marketing - Marketing cost) ÷ Marketing cost
Worked example
Illustrative numbersA $100,000 campaign brings in three times its cost in revenue, which is a 3x ROAS. The product has a 30% gross margin.
Revenue
$100,000 spend × 3 = $300,000
Gross profit
$300,000 revenue × 30% = $90,000
Marketing ROI
($90,000 profit - $100,000 cost) ÷ $100,000 cost = -10%
What it tells you
Marketing reports 3x while finance sees a 10% loss. Both are correct, because they answer different questions.