ROAS vs ROI: what each measures and when to use it

ROAS divides revenue from ads by ad spend. ROI divides net profit by total investment. ROAS tells you whether a campaign brings in more revenue than it costs to run; ROI tells you whether the whole effort made money after all costs.

The ROAS formula

ROAS = revenue from ads ÷ ad spend

Google's help page gives the example "$5 USD in sales ÷ $1 USD in ad spend x 100% = 500% target ROAS" (Google Ads help). You'll see the same number written as 500% or 5×.

The ROI formula

Investopedia gives ROI as (Current Value of Investment minus Cost of Investment) ÷ Cost of Investment, where the cost includes "fees and expenses" (Investopedia).

For a campaign, that becomes:

ROI = (revenue minus all costs) ÷ all costs

All costs means ad spend plus product costs, shipping, fees and anything else the sales cost you.

Side by side

Top of the fraction. ROAS uses revenue. ROI uses profit, which is revenue minus all costs.

Bottom of the fraction. ROAS uses ad spend. ROI uses all costs.

Usual form. ROAS is written as 3× or 300%. ROI is a percentage.

What it answers. ROAS: does this campaign bring in more than it spends on ads? ROI: did the effort make money?

Needs product costs? ROAS doesn't. ROI does.

Illustrative example: one campaign, both ways

Round numbers, not a customer. A campaign spends €2,000 on ads and brings in €6,000 of sales.

ROAS = €6,000 ÷ €2,000 = 3× (300%).

ROI, version 1. Products cost €3,000 and shipping and fees cost €600.

All costs = €2,000 + €3,000 + €600 = €5,600. Profit = €400. ROI = €400 ÷ €5,600 = about 7%.

ROI, version 2. Same campaign, but products cost €3,600.

All costs = €6,200. Profit = minus €200. ROI = about minus 3%.

ROAS is 3× in both. ROI went from positive to negative on a €600 change in product costs. That's why ROAS alone can't tell you whether you made money.

Which revenue to use

Both formulas start with revenue, so the revenue has to be right. Ad platforms report the revenue they credit to their own ads. Your payment processor reports what was collected. They can disagree. One r/PPC poster: "when I compare ga4 and google ads revenue to stripe (which is the actual source of truth), the gap is big enough that it also makes me question attribution itself, not just ROAS." (r/PPC, January 2026)

Use payments collected for the same dates as the spend. Our true ROAS guide covers this in detail, and the platform vs payment gap calculator shows how far apart the two can be.

Which one to show clients

Campaign decisions: ROAS. It's quick, it's what the ad platforms bid on, and you can compare campaigns with it. Check it against break-even ROAS so a "good" ROAS is above the line where you start losing money.

Business decisions: ROI. It's the only one of the two that tells you if the work paid off after costs.

Monthly report: both, with the revenue source written next to each. The ROAS calculator gives the ROAS figure as × and %.

For more on reporting to clients, see our PPC reporting guide.