Total Sales through Ads: 630000
Cost of the goods: 590000
Cost of Advertising: 22500
If I follow AdWords ROI formula, I have a ROI of 2.85%: (Sales - Total Cost)/Total Costs = (630000 - 612500)/612500.
But I understood that ROI was Profit / Investment and that's how I saw it in many places. Which would be a ROI of 77%: (Profit - Cost of Ads) / Cost of Ads = (40000 - 22500) / 22500
I even saw a formula stating ROI which would be a crazy 2522%: (Revenue - Cost of Ads) / Cost of Ads.: (630000 - 22500)/22500
So if someone asks me for my PPC ROI in AdWords... what should I say? Really confused here.