ROI vs. ROMI: What’s the Diff?

August 06, 2021

Businesses that are not tracking marketing revenue are playing a dangerous game, but looking at only one metric could also cause a company to miss critical feedback. Read through B2B blogs and newsletters, and you may see ROI and ROMI used interchangeably. Both are metrics designed to measure the effectiveness of your ad campaigns, and often people refer to ROI when they’re really talking about ROMI. Let’s take a closer look at ROI, ROMI, and how to use both to measure your marketing campaigns. 

What ROI can (and can’t) do for you 

The beauty of using ROI–return on investment–calculations is that it generates an easy-to-understand percentage that delivers immediate feedback to marketers regarding the success or failure of marketing investments. It can also allow marketers to compare different investments for various projects to determine what’s working for the company and what is tanking. ROI enables the comparison of even vastly different types of projects and is an excellent primary gauge. It also requires easily obtainable data to give a reliable rate of return. 

Despite the usefulness of calculating ROI for a project, it does have limitations. Marketers who do not take those limitations into account could be leaving money on the table or missing opportunities in time. Determining basic ROI often does not include factoring in the amount of time a marketing campaign runs or the realization of the return on the investment. Project A might have an ROI of 38%, while Project B comes in at 28%. If returns for Project A took four years, and the returns for Project B took only one year, then basing a determination of success on the percentage alone isn’t entirely accurate. 

ROMI by any other name 

Probably the biggest issue in marketing is how many people disagree about the relationship between ROI and ROMI. Many outlets use the terms interchangeably, while others argue that the calculations are absolutely different. In fact, ROMI–return on marketing investment–is both a more specific calculation and a different way of representing the value of a marketing investment to the business. Some businesses will calculate ROMI to produce a percentage outcome, and others will view it as a multiple–e.g., Project A earned $16 for every marketing dollar spent. 

ROMI for a project is more complicated than ROI because it integrates far more information into the mix. Businesses can run ROMI calculations for the short- and long-term. Some factors a business can incorporate into a ROMI calculation are intangible or not easily expressed in dollar amounts. Using ROI metrics alone means a business might not be properly tracking brand awareness. A business could miss the mark with calculating ROMI if it is not clear about the marketing campaign’s goals. Profits may only be part of the desired outcome. If building brand awareness or creating meaningful B2B networks is a goal, ROMI can capture that effort. It is entirely possible to have a marketing campaign achieve a poor ROI but a positive ROMI. 

Room for both ROI and ROMI 

There is no need to limit investment data to only ROI or ROMI. Calculating both can create valuable data points to help a marketing team determine the final outcome and the net benefits or losses associated with a campaign. Using ROI to monitor immediate or short-term sales is useful. Adding in ROMI metrics can give a fuller picture and allow businesses to intelligently trim marketing branches that will not bear fruit and wait out those that show every sign of fruiting in the future. ROI and ROMI are partner metrics, and successful businesses regularly evaluate both.