Marketing ROI calculator
This calculator needs JavaScript. The formula and the worked example on this page show how it works.
Leave blank to measure against revenue only.
Result
Enter a value above 0 in each field.
Formula
Marketing ROI = (revenue - cost of goods or case costs - marketing cost) / marketing cost
Cost of goods or case costs is 0 when left blank
How do you calculate marketing ROI?
Marketing ROI (returnReturnA buyer's request for credit on a lead that fails agreed standards, such as a disconnected number, a duplicate or a lead outside the filters. Glossary on investment) is the return after marketing cost, divided by the marketing cost. The marketing ROI formula is:
Marketing ROI = (revenue - cost of goods or case costs - marketing cost) / marketing cost
Cost of goods or case costs is optional. Leave it blank to measure the campaign against revenue only. Enter it to measure against gross profit, which is closer to what the campaign actually earned you. The calculator shows the ROI as a percentage and the return after marketing cost in dollars.
Example (made-up numbers)
Revenue of $5,000 and marketing cost of $1,000, cost of goods left blank: ($5,000 - $0 - $1,000) / $1,000 = 400% ROI, with a $4,000.00 return after marketing cost.
The same campaign with $2,000 of cost of goods: ($5,000 - $2,000 - $1,000) / $1,000 = 200% ROI, with a $2,000.00 return after marketing cost.
How to use the marketing ROI calculator
- Enter the revenue from the campaign: only the sales or cases that came from it.
- Enter the marketing cost: ad spend, lead purchases, agency or freelancer fees, tools and creative for the same campaign.
- If you want ROI on profit, enter the cost of goods or case costs for the sales the campaign produced. Otherwise leave it blank.
- Read the ROI and the return in dollars as you type. Use Copy result to paste them into a report, or Clear inputs to start again.
If you buy leads, the marketing cost is what you paid for the leads, after any return credits, plus the cost of working them if you want a full picture. Revenue is what the customers from those leads paid you.
How to read the result
An ROI above zero means the campaign returned more than it cost. An ROI of zero means it paid for itself and nothing more. A negative ROI, shown with a negative dollar return, means the campaign cost more than it brought in.
ROI with cost of goods left out will always be higher than ROI with it included. Use the version that matches the decision. For comparing two campaigns that sell the same thing, revenue-only ROI is enough. For deciding whether to spend more, include cost of goods or case costs.
For campaigns where customers buy more than once, the first sale may understate the return. Use the LTV calculator to estimate lifetime revenue, and the lead value calculator to see what one lead is worth to you.
Common marketing ROI mistakes
- Confusing ROI with ROASROAS (return on ad spend)The revenue a campaign earns for each dollar spent on ads. Glossary. ROAS divides revenue by ad spend and does not subtract costs. The ROAS calculator works that out separately.
- Leaving costs out of the marketing cost. Fees, tools, creative and staff time spent on the campaign are part of what it cost.
- Counting revenue the campaign did not produce. Referrals and repeat customers from earlier campaigns make ROI look higher than it is.
- Measuring too early. If sales or cases take months to close, an ROI taken in the first weeks will be low. Measure again once the leads have had time to close.
Embed this calculator
You can add this marketing ROI calculator to your own site. Copy the code below and paste it into your page. It loads the calculator in a frame and includes a credit link to this page.
Frequently asked questions
How do you calculate marketing ROI?
Subtract the marketing cost, and the cost of goods or case costs if you want ROI on profit, from the revenue the campaign produced. Divide the result by the marketing cost and multiply by 100 for a percentage.
What is the difference between marketing ROI and ROAS?
ROAS is revenue divided by ad spend. Marketing ROI subtracts costs first, so it shows the return after the campaign has paid for itself.
Should I include cost of goods in marketing ROI?
Include it when you decide whether a campaign is worth more budget, because revenue alone ignores what it costs to deliver the sale. Leave it out when you only compare campaigns that sell the same thing.
What does a negative marketing ROI mean?
It means the campaign cost more than it returned over the period you measured. Check whether sales are still closing before you stop it.
Related tools
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