Return on Investment

Return on investment (ROI) shows how much profit an investment produced relative to its cost, the most general measure of return on a spend.

ROI is the most general measure of return, and that generality is both its strength and weakness. Unlike return on ad spend, which measures revenue, ROI measures net profit, so it includes real costs and is more honest. But that same completeness makes it hard: all costs must be counted, not just the direct ones, and the time horizon must be stated, because a three-month campaign's ROI is not comparable to an annual investment's unless normalized to one period. The common trap is counting cost or revenue partially, which inflates ROI artificially. For an analytics tool, the honest point is that ROI is almost always computed outside the tool: both profit and part of the costs live in finance systems. What the site tool does is provide the behavioral half of the equation, namely conversions and attributed revenue.