What is the difference between ROI and ROAS in eCommerce?
An example of an AI chatbot conversation about ROI vs ROAS in eCommerce.
What is the difference between ROI and ROAS in eCommerce?
ROI (Return on Investment) measures the overall profitability of an investment, while ROAS (Return on Ad Spend) specifically evaluates the revenue generated from advertising campaigns.
Can you give me an example of how to calculate both?
Sure! For ROI, if you invest $1000 and earn $1500, your ROI is (1500-1000)/1000 = 0.5 or 50%. For ROAS, if you spend $200 on ads and make $800 in sales, your ROAS is 800/200 = 4, meaning you earn $4 for every $1 spent.
Which metric should I focus on for my eCommerce business?
It depends on your goals. If you're looking at overall profitability, focus on ROI. If you're optimizing ad performance, ROAS is more relevant.
Are there any tools to help track these metrics?
Yes, many eCommerce platforms and analytics tools like Google Analytics, Shopify, and Facebook Ads Manager can help you track both ROI and ROAS.
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