What is marketing ROI? Return on marketing explained
Marketing ROI, also called ROMI, compares the profit your marketing generates with what it costs. Here is what it means, how to calculate it, a worked AED example, how it differs from ROAS and why attribution makes it hard to measure.
Marketing ROI, also called ROMI, measures the profit your marketing generates compared with what it costs. Subtract marketing cost from the gross profit marketing produced, then divide by marketing cost. A marketing ROI of 150% means every AED 1 invested returned its cost plus AED 1.50 of profit. Unlike ROAS, it uses profit, not revenue.
How do you calculate marketing ROI?
| Version | Formula |
|---|---|
| Marketing ROI | (Gross profit from marketing − marketing cost) ÷ marketing cost × 100 |
| Revenue-based shortcut | (Revenue from marketing − marketing cost) ÷ marketing cost × 100 |
The shortcut overstates returns because it ignores the cost of the products sold, so use gross profit or contribution where you can. Decide which costs count as marketing, such as media, agencies, tools, content and salaries, and keep that list fixed.
Marketing ROI example
An illustrative quarter for a UAE home appliances brand:
- Marketing cost: AED 250,000, made up of media AED 180,000, agency and content AED 50,000 and tools AED 20,000.
- Revenue attributed to marketing: AED 1,500,000 at a 35% gross margin, so AED 525,000 of gross profit.
- Marketing ROI: (525,000 − 250,000) ÷ 250,000 = 110%.
- The revenue-based shortcut would show 500%, a very different story.
What is a good marketing ROI?
Anything above 0% means marketing returned more profit than it cost, but what counts as good depends on your margins, overheads, payback needs and how much of the revenue would have come anyway. Compare it with your own history and with other uses of the same money. The marketing ROI calculator does the math for your own numbers.
Why is marketing ROI hard to measure?
Marketing ROI is only as good as the revenue you credit to marketing. Your attribution model decides which sales count, and ad platforms often claim the same sale. Incrementality tests and marketing mix modeling estimate how many sales marketing actually caused, which is the figure ROI should use.
How Grower helps
Grower sets budgets by month, quarter or year and by campaign group, compares them with live spend from connected channels and generates budget insights every month. Its attribution engine de-duplicates conversions from every channel and app into one unified conversion count.
Frequently asked questions
What is the difference between marketing ROI and ROAS?
ROAS divides revenue by ad spend and covers paid media only. Marketing ROI divides net profit by total marketing cost, which can include agencies, tools, content and salaries. ROAS helps you run campaigns day to day, while ROI answers whether marketing as a whole makes money. A ROAS of 4 can still mean negative ROI if margins are thin.
Should salaries be included in marketing ROI?
Include them if you want the full picture of what marketing costs the business, especially when comparing an in-house team with an agency. Leave them out when comparing campaigns or channels, since salaries do not change from one campaign to the next. Either way, write the definition down and apply it consistently every quarter.
How do you measure ROI for brand campaigns?
Brand campaigns rarely drive measurable last-click sales, so their direct ROI looks poor. Measure them with incrementality tests such as geographic holdouts, track branded search volume and direct traffic over time, and use marketing mix modeling once you have enough history. Judge them over months rather than days, against a period or region without the campaign.
Run your own numbers with the free marketing ROI calculator, or plan next year's spend with the marketing budget calculator.