Simple vs annualised ROI
Simple ROI ignores time. To compare investments of different lengths, use annualised ROI (CAGR): (returned ÷ invested)^(1 ÷ years) − 1. A 50 % gain over 3 years is about 14.5 % per year.
ROI for marketing
Use revenue (or profit) from a campaign as the amount returned and the campaign cost as the amount invested. For ad metrics such as ROAS, CPC and CPA, use the CPM, CPC, CTR & ROAS Calculator.
Frequently asked questions
What is a good ROI?
It depends on risk and time; compare it with alternatives, such as a savings account or market index, over the same period.
Can ROI be negative?
Yes, when you get back less than you invested.
What is CAGR?
Compound annual growth rate — the yearly rate that would turn the investment into the final amount.