Money & metrics · also called return on investment
ROI (return on investment)
ROI is profit expressed as a percentage of what was spent: revenue minus cost, divided by cost.
Return on investment tells you how hard each unit of spend worked. Spend $200, receive $270, and profit is $70, so ROI is 35%. Zero means break-even; a negative figure is a loss.
Arbitrageurs watch ROI every day at every level: campaign, ad, country, hour. Search arbitrage ROI on scaled campaigns tends to be modest, and a thin margin on large volume is how the business works. That thinness is why three adjustments matter.
First, dashboard ROI uses estimated revenue. The true figure comes only after the feed's deductions (see clawback). Second, ad spend is not the only cost: tracker fees, agency fees, content, staff and payment charges all sit below the campaign line. Third, ROI ignores time. A 20% return that is paid 45 days later ties up cash (see cash-flow float). Note also the difference from ROAS: 135% ROAS and 35% ROI describe the same campaign.
An example
Say spend is $200 and estimated revenue $270: ROI = (270 - 200) / 200 = 35%. A 10% deduction cuts revenue to $243: ROI = 43 / 200 = 21.5%. At a 30% deduction, revenue is $189 and ROI is -5.5%.
Related terms
ROAS (return on ad spend)
ROAS is revenue divided by advertising spend, usually shown as a percentage or multiple; 100% (1.0x) means the ads exactly paid for themselves.
Profit margin
Profit margin is profit as a percentage of revenue: the share of each dollar earned that is left after costs.
Break-even point
The break-even point is where revenue exactly equals cost, so a campaign makes neither profit nor loss.
The spread (margin)
The spread is the gap between what an arbitrageur earns from a visitor and what that visitor cost to buy.
Clawback (revenue deduction)
A clawback is revenue a feed removes from a publisher's earnings after the fact, usually because clicks were judged invalid and the advertiser was refunded.
Unit economics
Unit economics is the profit or loss on a single unit of the business, which in search arbitrage means one visitor or one click bought.