Marketing ROI: Formula, Cost Scope and the Difference from ROAS

Compare ROI and ROAS using one example

Assume fictional attributed revenue of JPY10 million, delivery costs of JPY5 million, ad spend of JPY1 million and production/operations of JPY500,000. Gross profit before the investment is JPY5 million; total investment is JPY1.5 million.

ROAS does not include delivery, production or operating costs. A high revenue return on ad spend can coexist with weak profit. See Google's ROI explanation, and state the scope used in your own report.

Define included costs

Full-cost and incremental-cost decisions can use different scopes, but label them clearly. Do not compare their ROI figures as though the cost basis were identical.

Distinguish CPA and CAC

If the example generates 100 inquiries and ten new customers, media-only inquiry CPA is JPY10,000. Including production and operations raises inquiry cost to JPY15,000. Dividing JPY1.5 million by ten new customers gives JPY150,000 CAC within that scope.

This CAC excludes separate sales costs, so it is not fully loaded company CAC. An inquiry or download conversion is not automatically a new customer.

Test sensitivity

At JPY1.5 million investment and a 50% margin, the simplified break-even revenue is JPY3 million. Shared costs, timing and risk still matter, so a positive ROI is not an automatic instruction to scale spending.

Match cohorts and consider payback

Current-month ad costs and current-month bookings may concern different customer cohorts. Follow acquisition or opportunity cohorts and leave open deals visible as interim results.

With fictional CAC of JPY150,000 and constant monthly gross profit of JPY30,000 per customer, simple payback is five months. This ignores churn, changing revenue, initial support and payment terms; it is not a complete cash-recovery forecast.

Attribution does not establish incremental profit

Revenue credited to an ad can include purchases that would have occurred anyway. Attribution-based ROI is different from a causal estimate using an appropriate control or experimental design. Advertising-value equivalents or invented monetary values for impressions are not actual profit either.

At review, reconcile revenue, costs and periods; check duplicate deductions; handle returns, cancellations and unconfirmed revenue; distinguish inquiry CPA from customer CAC; and record sensitivity to changed assumptions. Use ROI alongside gross-profit amount, acquisition quality, payback and execution capacity.

Related practical guides

• Ad Performance Measurement: Metrics, Attribution and a Worked Example
• How to Create a Marketing Budget Proposal: Worked Example and Template
• How to Set a Marketing Budget: Three Methods and Scenario Planning
• 8 Strategies to Increase Customer Lifetime Value: Prioritization and Measurement

Keep budgets and execution connected

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References

Official sources checked September 29, 2026. Product pricing and availability may vary by market, plan and contract.

• Google Ads：投資収益率（ROI）/ Return on investment