Paid Media
Marketing ROI Calculator
Marketing ROI calculated on revenue is a number that makes bad campaigns look good. This one runs on gross profit, because a dollar of revenue you spent 45 cents to deliver is not a dollar of return.
Result
FormulaMarketing ROI = ((revenue × gross margin %) − marketing cost) ÷ marketing cost × 100
Worked example
$260,000 of attributed revenue at 55 percent gross margin is $143,000 of gross profit. Against $60,000 of marketing cost that is a 138.3 percent ROI, or $2.38 of gross profit for every dollar spent. The revenue-based version of the same campaign reads 333.3 percent, which is why the two numbers should never appear in a deck without a label.
What to watch for
The weak point in every marketing ROI figure is the word attributed. Before arguing about the percentage, agree on the attribution model, the lookback window and whether repeat purchases count. Most ROI disputes are attribution disputes in disguise.
Brand and demand capture have completely different ROI shapes. Search capture converts existing intent and looks superb on a 30-day window, while brand investment looks terrible on the same window and pays over quarters. Judging them with one measurement period will always kill the brand budget.
In practice I hold clients to a gross profit ROI floor rather than a target. A floor keeps decisions consistent when a good month tempts everyone to spend into thinner and thinner demand.
Frequently asked questions
What is a good marketing ROI?
It varies by margin structure and growth stage. A high-margin software business can accept a much lower short-term ROI because retention pays it back, while a thin-margin retailer needs profit on the first order. Set your floor from your own contribution margin.
Should I use revenue or gross profit?
Gross profit, always, for decisions. Revenue ROI is only useful as a top-line reference, and quoting it without the margin behind it is how businesses scale themselves into losses.
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This calculator runs entirely in your browser. Nothing you enter is sent to a server, logged, or stored. Figures are for planning and do not constitute financial advice. See disclosures.