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ROMI (return on marketing investment)

| Article: 3 min read | Analytics

ROMI (return on marketing investment, also MROI) is the profit that marketing spend brought in, relative to the spend itself. A positive ROMI means marketing earned more than it cost.

In plain words

ROMI answers the question: "How many hryvnias of profit were left from each hryvnia put into marketing?" Unlike ROAS, which looks at revenue, ROMI accounts for margin: cost of goods is subtracted from revenue, and only then is the result compared with ad spend.

The formula

ROMI = (incremental revenue from marketing x margin - marketing spend) / marketing spend

This is how the formula is given in the article on return on marketing investment (Wikipedia). The formula takes specifically incremental revenue, that is, revenue that would not have existed without the ads.

Example (made-up numbers)

The numbers are invented for illustration. A sporting goods store spent 100,000 UAH on advertising. The ads brought 400,000 UAH of revenue, and the margin after cost of goods and delivery is 30%.

  • Margin from ads: 400,000 x 0.3 = 120,000 UAH
  • ROMI = (120,000 - 100,000) / 100,000 = 0.2, or 20%

ROAS here equals 4 (400%) and looks great, while the real earnings are 20,000 UAH on 100,000 UAH of spend.

How different sources see it

The source states directly: revenue from an analytics system must be told apart from incremental revenue. Attribution models distribute credit by correlation and can overstate the result by crediting sales that would have happened without the ads. The true effect is measured by controlled tests with a control group (Wikipedia). There are no fresh measurements of how inaccurately ad platforms estimate payback.

What has changed: measurement without "last click"

In January 2025 Google opened up Meridian to everyone, its open-source marketing mix model (MMM): it uses a Bayesian causal approach and can take incrementality test results as priors, to calibrate the model against real experiments (MarTech, 29.01.2025, updated 30.09.2025; Meridian repository, Apache-2.0 license). For a store, this means measuring ROMI outside platform attribution becomes more accessible, but it needs spend and sales data across several periods or regions and an analyst's skills. For a small store, a simple test is often enough: switch off ads in one region or for one group of products and compare sales with a control group.

Common mistakes

  • Calculating ROMI from revenue instead of margin. Then it matches ROAS and shows nothing new.
  • Leaving out some costs: the budget, contractor fees, discounts and promo codes.
  • Taking attribution at its word. Buyers searching for the brand would have come anyway, and the ads take credit for their revenue.
  • Looking only at the short term. Short-term ROMI does not see long effects, such as repeat purchases (LTV).

FAQ

What is ROMI in plain words? It is the profit from marketing relative to what it cost. If ROMI is 20%, then out of every 100 UAH of advertising, 20 UAH of profit remained.

How do I calculate ROMI? Take the revenue from ads, multiply by the margin, subtract the marketing spend and divide by that spend.

How does ROMI differ from ROAS? ROAS counts revenue per hryvnia of advertising, ROMI counts profit. A store with ROAS 4 and a low margin can have a ROMI near zero.

What ROMI is considered normal? There is no general norm. The basic criterion: a ROMI above zero means the spend paid back, and after that everything depends on what you want to do with the profit.

Sources

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