1. What is ROAS (Return on Ad Spend)?
ROAS measures how much revenue you generate for every rupee spent on ads.
Formula:
ROAS = Revenue from Ads ÷ Ad Spend
Example:
Spend ₹10,000 → Generate ₹50,000
ROAS = 5x
👉 Best for: Evaluating ad campaign performance
2. What is ROI (Return on Investment)?
ROI looks at overall profitability, not just ad spend—it includes all costs.
Formula:
ROI = (Net Profit ÷ Total Investment) × 100
Example:
Revenue = ₹50,000
Total Cost (ads + team + tools) = ₹30,000
Profit = ₹20,000
ROI = 66.6%
👉 Best for: Measuring true business profitability
3. What is ROAR (Return on Advertising Revenue)?
ROAR is a broader, more strategic metric—it evaluates how ads impact total business revenue, not just direct conversions.
Formula:
ROAR = Total Revenue Growth ÷ Ad Spend
👉 Includes:
- Brand awareness impact
- Repeat purchases
- Organic growth driven by ads
👉 Best for: Understanding long-term growth impact of marketing
Key Differences
| Metric | Focus | Scope | When to Use |
|---|---|---|---|
| ROAS | Ad efficiency | Direct revenue | Campaign optimization |
| ROI | Profitability | All costs | Business decisions |
| ROAR | Revenue growth | Holistic impact | Scaling strategy |
How They Work Together
- ROAS tells you if your ads are working
- ROI tells you if your business is profitable
- ROAR tells you if your marketing is scaling growth
Simple Analogy
Think of it like this:
- ROAS = Are my ads making money?
- ROI = Am I actually profiting?
- ROAR = Is my business growing because of marketing?
Pro Insight
Most businesses stop at ROAS—but real growth comes when you:
- Optimize for ROI
- Scale with ROAR thinking