// glossary entry

Return on Investment (ROI)

What is Return on Investment (ROI)?

Return on Investment (ROI) measures the profit from an investment relative to the capital invested, usually as a percentage. Formula: (Profit minus costs) divided by costs, multiplied by 100. In marketing, ROI helps with budget decisions but has clear limitations: Brand effects, long-term customer value, and multi-touch paths are difficult to attribute unequivocally. At Waterproof Web Wizard, we combine ROI with metrics such as CLV and CAC, only the big picture reveals whether a marketing investment was truly profitable.

// synonyms

  • ROI
  • Return on Investment
  • Profitability
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