Let's clear things up.
ROI, ROMI, and ROAS are key metrics for evaluating the profitability of investments, including in marketing and advertising. Despite their common goal of measuring return on investment, there are significant differences in their interpretation. Here's my humble take on the main distinctions and similarities between them:
𝗥𝗢𝗜 (𝗥𝗲𝘁𝘂𝗿𝗻 𝗼𝗻 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁)
Calculated as total profit minus expenses, divided by expenses.
Allows assessment of the overall financial outcome of business investments.
Measured in percentages. Always (always) calculated based on profit. Ideally - based on marginal profit (minus fixed costs).
𝗥𝗢𝗠𝗜 (𝗥𝗲𝘁𝘂𝗿𝗻 𝗼𝗻 𝗠𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁)
Calculated as marketing revenue minus marketing expenses, divided by marketing costs. In other words, it literally measures the profitability of your marketing. Marketing here includes not only performance but also media, brand, PR, and more. Measured in percentages.
𝗥𝗢𝗔𝗦 (𝗥𝗲𝘁𝘂𝗿𝗻 𝗼𝗻 𝗔𝗱𝘃𝗲𝗿𝘁𝗶𝘀𝗶𝗻𝗴 𝗦𝗽𝗲𝗻𝗱)
Calculated as advertising revenue generated by advertising campaigns, divided by advertising expenses. Allows evaluation of the return on advertising expenditures. Literally - how many percent of your performance expenses come back into your pocket. Measured in percentages and considered cohort-wise.
If you work with GA4 to BigQuery exports, be sure to check out my SQL cheat sheet.
