ROI (Return On Investment) is the revenue generated against the overall investment. It includes the expenses on people, tools, along with the expenses on your ads. Whereas , ROAS is the revenue you generate against the amount only spent on ads.   ROI = Net Profit x 100   Net Spend     Revenue generated against the overall investment on tools, people, Includes expenses on people, tools and ads Determines the overall profitability   ROAS = Revenue Generated from Ads x 100   Advertising Spend     Revenue generated against only the ad expenditure Includes expenses on people, tools and ads Does not take into account any expenses except for ads Gives you insights on your ad performance (like number of impressions /clicks/ revenue) To better understand the difference between the 2, let us go through an example : You spend $100 on ads and generate a revenue of $200. The amount spent on other things like software, personnel, etc is $150. Therefore,   ROI = -$50 = -20%   $250     This indicates a loss of 20 %   ROAS = -$200 = 200%   $100     This indicates a 200% return So if you measure your returns using ROAS, your ads are very effective. However in reality, the company is suffering a loss of 20%. Hence, a Business needs to have both metrics to analyze the performance accurately. All in all, use ROI to check your profitability, and if you find Facebook ads to be one of the contributors to your success, then focus on improving your ROAS. Thankfully, there are ways to increase the returns on your advertising dollars spent on Facebook. Keep these tips in mind as you work to improve your Facebook ROAS, and watch those profits soar!