Let's go back to our e-commerce example

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It seems a little confusing, but it's not as difficult as it seems.


Our ROI is 1.73, so if we wanted to calculate the annualized ROI for a 2 year time period, we would have:

[ (1 + 1.73) 1/2 - 1 ] x 100 = 65.14%

3 Frequently Asked Questions About Return On Investment
Doubts? Fear not, you are not the only one! As simple as these calculations are, those without a background in economics or a background in mathematics - er, like me, er - may feel overwhelmed by all these formulas and definitions.

Here are three of the most frequently asked questions that entrepreneurs like you ask when they are new to the world of ROI.

What is the difference between ROI and ROAS?
While ROI indicates the return on investment, ROAS is a metric that uae email list indicates the return on advertising investment, without taking into account all costs and expenses.

calculate roas

The acronym in fact indicates Return On Advertising Spend, and differs from ROI because it is the difference between the profit deriving from the campaign and the expenditure incurred for the campaign.

So, always going back to our e-commerce example, if you invested 110 euros for your campaign, making a turnover of 300 euros, your ROAS will be calculated as follows:

300 - 110 = 190 €

So, ROAS is a specific indicator for advertising expenses and earnings, while ROI is able to measure the profitability of a campaign (or any other investment) taking into account all costs, from shipping costs to warehouse costs.