Learning library
Unit 3 · Implementation and Agencies · Module 20 of 40
Advertising ROI and Effectiveness
Learning objective
Calculate ROI, ROAS and payback with honest attribution caveats.
Concept summary
ROI equals incremental gross profit minus spend, divided by spend. ROAS ignores margin and so misleads on thin-margin goods. Incrementality tests, holdouts and marketing-mix models correct the over-claiming built into last-click attribution.
Application task
Compute ROI and ROAS for a hypothetical campaign and state which decision each supports.