ROAS vs ROI Explained: How to Measure Ad Profitability in Google Sheets

Guide • Metrics

ROAS and ROI sound similar, but they answer different questions. This guide explains the difference, shows simple formulas with an example, and explains when to use each in real reporting.

📊 ROAS 💵 ROI

On this page

• What is ROAS
• What is ROI
• Key differences
• When to use each
• FAQ

1) What is ROAS

ROAS means Return on Ad Spend. It shows how much revenue you earn for every dollar of ad spend.

Formula

ROAS = Revenue ÷ Ad Spend

Example: Spend is $1,000 and revenue is $4,000. ROAS is 4.0.

Why it matters ROAS is fast to calculate and perfect for day to day budget shifts and campaign comparisons.

2) What is ROI

ROI means Return on Investment. It looks at profit relative to total costs like product cost, ad spend, fees, and overhead.

Formula

ROI = (Revenue − Total Costs) ÷ Total Costs

Example: Revenue is $4,000. Total costs are $2,500. Profit is $1,500. ROI is 60%.

Why it matters ROI tells you if the business is truly profitable once all costs are included.

3) Key differences

• ROAS uses ad spend and revenue. Quick efficiency check for campaigns.
• ROI uses all costs and revenue. Clear view of profit and business impact.
• Use ROAS for optimization. Use ROI for strategy and finance reviews.

Free ROI Calculator Template

See ROI, profit, and margin automatically in Google Sheets. Copy the free ROI Calculator and skip setup.

Download Free Template

4) When to use each

Use ROAS when

• You are comparing campaigns, ad sets, or creatives.
• You are moving budget across platforms and need a clean efficiency metric.
• You are doing daily or weekly optimizations.

Use ROI when

• You are reviewing profitability with finance.
• You need to factor product cost, shipping, and overhead into the analysis.
• You are making pricing or scale decisions at the business level.

Automate your ROAS tracking

The SignalLift Ad Performance Dashboard calculates ROAS from your exported ad data. Paste your data and review campaign efficiency in minutes.

Get the Dashboard

FAQ

Is ROAS the same as ROI

No. ROAS compares revenue to ad spend. ROI compares profit to all costs.

Why does a strong ROAS not always mean strong profit

Because product cost and other fees reduce profit. Check ROI or use the free ROI calculator for profit and margin.

Does the SignalLift dashboard calculate ROI

The paid dashboard focuses on ROAS for campaign efficiency. For ROI, profit, and margin use the free ROI Calculator template.