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ROI (Return on Investment)

Also known asReturn on InvestmentMarketing ROI

Net profit divided by total investment — the bottom-line profitability measure, distinct from ROAS because ROI nets out platform commission, cost of goods, and overhead.

Key takeaways

  1. 01ROI = net profit ÷ total investment. It is the after-costs profitability number, not a gross return.
  2. 02ROI vs [[roas]]: ROAS is gross (revenue ÷ ad spend); ROI is net (profit ÷ total investment).
  3. 03A ~1.5x ROAS often translates to barely-positive ROI after the 30% platform cut, COGS, and overhead.
  4. 04Use ROAS for tactical campaign decisions; use ROI for strategic capital allocation.

ROI (return on investment) is the bottom-line profitability measure: net profit divided by total investment. In a mobile-marketing context it answers "after every cost, did this make money?" — which makes it the metric for strategic decisions about where to put capital.

The crucial distinction is ROI vs [[roas]]. ROAS is *gross* — revenue ÷ ad spend — and ignores platform commission, cost of goods, and overhead. ROI is *net* — profit ÷ total investment. Because Apple and Google take a commission and there are real serving and operating costs, a headline 1.5x ROAS often lands at barely-positive net ROI. Reading a healthy ROAS as healthy profit is a common and expensive mistake.

In practice the two are complementary: use ROAS (and [[cpi]] / [[cac]] against [[ltv]]) for fast campaign-level decisions, and ROI for board-level capital allocation. Both connect to the same engine — retention and monetization build the lifetime value that turns spend into return — and ROI is just the version that survives contact with the full cost stack. See also [[payback-period]] for the time dimension of the same question.

Quick answers

What is ROI in mobile app marketing?

ROI (return on investment) is net profit divided by total investment — the after-all-costs profitability of a spend. Unlike ROAS, it accounts for platform commission, cost of goods, and overhead, so it reflects what actually reached the bottom line.

What is the difference between ROI and ROAS?

ROAS is gross: revenue ÷ ad spend, before costs. ROI is net: profit ÷ total investment, after platform fees, COGS, and overhead. A 1.5x ROAS can be close to break-even ROI once the 30% store cut and operating costs are subtracted, so they should not be read interchangeably.

What is a good marketing ROI for an app?

It depends on cost of capital and your fixed-cost base, but ROI must be positive after all costs to be sustainable, and most teams want a clear margin above break-even before scaling. Because ROI nets out fees and overhead, the ROAS target that produces a healthy ROI is meaningfully higher than 1x.

How do you calculate app marketing ROI?

Take the net profit attributable to the spend (revenue minus platform commission, cost of goods, and the spend itself) and divide by the total investment. The hard part is measuring profit-quality revenue over the right window, which is why ROI is usually computed on cohorts using LTV rather than first-week revenue.

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