The profit an investment returns relative to its cost: (gain minus cost) divided by cost. In marketing, it should use margin or profit, not revenue, and include all costs, not just media.
When justifying budget to leadership, comparing campaigns, channels and vendors, and deciding where the next dollar goes.
A $5,000 campaign producing $20,000 in sales at 40% margin returns $8,000 gross profit, a 60% ROI; an agency retainer judged on profit from attributed deals rather than traffic.
The language leadership speaks, so learn to speak it. Flagged when ROI is calculated on revenue, ignores labor and tools, or quietly swaps in ROAS.
