{"id":8019,"date":"2026-10-25T14:46:33","date_gmt":"2026-10-25T07:46:33","guid":{"rendered":"https:\/\/adtek.agency\/glossary\/roi\/"},"modified":"2026-10-25T14:46:33","modified_gmt":"2026-10-25T07:46:33","slug":"roi","status":"publish","type":"mona_glossary","link":"https:\/\/adtek.agency\/en\/glossary\/roi\/","title":{"rendered":"ROI (Return on Investment)"},"content":{"rendered":"

ROI (return on investment) is the net profit from an investment divided by the cost of that investment, shown as a percentage. An ROI of 50% means every 1 dong you put in brings back 1.5 dong, a profit of 0.5 dong.<\/p>\n

What is ROI?<\/h2>\n

The Cambridge Dictionary defines return on investment as the profit from an activity for a particular period compared with the amount invested in it (Cambridge Dictionary, accessed October 2026<\/a>). In marketing, the investment is the campaign, and the profit is what the campaign brings in after every related cost is subtracted.<\/p>\n

Google Ads describes ROI as the ratio of your net profit to your costs, and calls it typically the most important measurement for an advertiser because it shows the real effect advertising has on the business (Google Ads Help, About return on investment, accessed October 2026<\/a>).<\/p>\n

ROI formula<\/h2>\n

ROI = (Revenue – Total costs) \/ Total costs \u00d7 100%<\/strong><\/p>\n

Google Ads writes it as (Revenue – Cost of goods sold) \/ Cost of goods sold. For physical products, cost of goods sold here means the manufacturing cost of the items sold plus advertising costs. Google’s example: a product costs $100 to make and sells for $200, ads sell 6 of them, and Google Ads costs are $200. ROI = (1,200 – 800) \/ 800 = 50% (Google Ads Help, Return on investment (ROI), accessed October 2026<\/a>).<\/p>\n

For a lead generation business, the cost is the ad spend and the revenue is the average value of a lead. Google’s example: if 1 in 10 leads becomes a $20 sale, each lead is worth $2.<\/p>\n

Example: ROI including cost of goods (hypothetical)<\/h2>\n

A shop sells air fryers at VND 1,500,000 each, with a cost of goods of VND 900,000. In October it spends VND 40 million on ads and sells 120 units. The shop pays VND 50,000 per order for delivery and packing.<\/p>\n