ROI
Return on Investment
A ratio that shows how much profit was generated relative to the money invested.
In Simple Terms
ROI is a metric that shows, as a percentage, how much profit you made compared to the money you spent on things like business activities or advertising. For example, if you spend 100,000 yen on ads and make 150,000 yen in profit, versus spending 200,000 yen and making the same 150,000 yen in profit, the first case has a higher ROI because less money was spent for the same result. Companies often use it as a benchmark to judge whether a new initiative is really worth the money before they commit to it.
Behind the Name
ROI is short for "Return on Investment". "Return" means the profit or gain you get back, and "Investment" is the money you put in up front. Put together, the term literally describes how much you get back for what you invested.
Take a Closer Look!
ROI is a number that shows the ratio between the money you spent on something like a business activity or an ad campaign and the profit you got back from it. Put simply, it's a way to measure how efficiently the money you spent generated more money.
The higher this number, the more efficiently you were able to turn your spending into profit without waste.
The calculation is simple: divide the profit you earned by the cost you spent, then multiply by 100 to get a percentage. For example, if you spend 10,000 yen and earn 20,000 yen in profit, the ROI works out to 200%.
Turning it into a concrete number like this lets you compare completely different jobs or projects on the same scale to see which one generated profit more effectively.
In marketing in particular, ROI is widely used to strictly measure cost-effectiveness — not just how much an ad increased sales, but ultimately how much "profit" it delivered.
It serves as an important standard for business decisions, like which ads deserve a limited budget.