Should you use ROI to measure your advertising?

ROI (& its little sibling ROAS) is still super-popular among marketers, platforms, and the C-suite to measure how well your advertising is doing.

It feels logical. It’s easy to calculate. And there are immediate things that can usually create immediate increases in it.

But It’s actually a crap choice. Here are the top five reasons why:

5. Attribution models are often voodoo

4. It doesn’t capture revenue generated

3. It doesn’t capture long-term effects

2. It’s inversely correlated with profit growth

1. And it doesn’t measure the “present value of future cash flow” (the mac daddy of ad metrics)

For these reasons (and others), it’s a crap choice. 

(Especially don’t trust in-platform measures of ROI. They’re incomplete, speculative, and, well, designed to make the platform look good.)

To boot, 99% of your future buyers are building consideration sets in their minds today for purchases they’ll make next [week month year].

So maybe use ROI to measure ad efficiency.

But not effectiveness. Please lord no.

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