Marketing ROI Calculator
Measure the profitability of your marketing campaigns and advertising spend.
How to Calculate Marketing ROI
Return on Investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment. In marketing, it helps businesses understand if the money spent on advertising, content creation, or SEO is generating a positive financial return.
The standard formula for Marketing ROI is:
ROI = [(Total Revenue – Total Cost) / Total Cost] x 100
Understanding the Metrics
- Net Profit: This is the total revenue minus the campaign costs. It represents the actual "new" money earned.
- ROAS (Return on Ad Spend): Unlike ROI which considers the profit margin, ROAS specifically looks at the gross revenue generated for every dollar spent on advertising.
- Benefit-to-Cost Ratio: This shows the relationship between the benefits and the costs, helping you see the scale of your return in a simple ratio format.
Imagine you spend $2,000 on a Facebook Ads campaign. This campaign results in sales totaling $10,000.
1. Profit = $10,000 – $2,000 = $8,000
2. ROI = ($8,000 / $2,000) x 100 = 400%
3. ROAS = $10,000 / $2,000 = 5.0x
Why Marketing ROI Matters for SEO and SEM
Tracking ROI allows marketers to justify their budgets. If an SEO strategy takes six months to show results, the ROI calculation helps prove that the long-term organic traffic is more cost-effective than continuous paid advertising. By using this calculator, you can compare different marketing channels and allocate your budget to the highest-performing strategies.