Your ROI will be displayed here.
Enter your ad spend, revenue, conversion rate, and AOV.
Understanding Ad Spend ROI
Return on Investment (ROI) is a fundamental metric in advertising used to measure the profitability of your ad campaigns. It helps you understand how much revenue you're generating for every dollar you spend on advertising. A positive ROI indicates a profitable campaign, while a negative ROI suggests that your ad spending is costing you more than you're earning.
The Math Behind the Calculator
This calculator uses a common formula to determine your Ad Spend ROI. While direct revenue attribution is the simplest way, understanding the components helps in strategic planning.
The primary calculation for ROI is:
ROI = ((Revenue Generated from Ads - Total Ad Spend) / Total Ad Spend) * 100
In this calculator, we use the provided Revenue Generated from Ads and Total Ad Spend.
Why Conversion Rate and Average Order Value Matter
While not directly in the primary ROI calculation (which uses direct revenue), the Conversion Rate and Average Order Value (AOV) are crucial for understanding campaign efficiency and potential. They help in forecasting and optimizing your campaigns:
Conversion Rate (CR): This is the percentage of people who take a desired action (e.g., make a purchase) after interacting with your ad.
CR = (Number of Conversions / Number of Clicks or Visitors) * 100
A higher conversion rate means your ads are more effective at driving action.
Average Order Value (AOV): This is the average amount a customer spends per order.
AOV = Total Revenue / Number of Orders
Knowing your AOV helps you set realistic revenue targets and understand the customer's typical spending habits.
You can use these metrics to estimate potential revenue. For instance, if you know your ad campaign brings in 10,000 visitors and your conversion rate is 2.5%, you expect 250 conversions. If your AOV is $100, that's $25,000 in potential revenue. This projected revenue can then be plugged into the ROI formula.
How to Use This Calculator
Total Ad Spend: Enter the total amount of money you have spent on your advertising campaign within a specific period.
Revenue Generated from Ads: Enter the total revenue directly attributable to that advertising campaign during the same period. This is the most critical figure for ROI.
Conversion Rate (%): (Optional but Recommended) Enter the percentage of users who converted (e.g., made a purchase) after seeing or clicking your ad.
Average Order Value ($): (Optional but Recommended) Enter the average value of each sale generated from the campaign.
Click "Calculate ROI" to see your campaign's profitability.
When to Use an Ad Spend ROI Calculator
Campaign Performance Evaluation: Assess if a specific ad campaign was profitable.
Budget Allocation: Decide where to allocate your advertising budget for maximum returns.
A/B Testing: Compare the ROI of different ad creatives, targeting, or platforms.
Forecasting: Estimate the potential profitability of future campaigns based on projected ad spend and expected results.
Budget Justification: Demonstrate the value and return generated by marketing efforts to stakeholders.
function calculateROI() {
var adSpend = parseFloat(document.getElementById("adSpend").value);
var revenueGenerated = parseFloat(document.getElementById("revenueGenerated").value);
var conversionRate = parseFloat(document.getElementById("conversionRate").value);
var averageOrderValue = parseFloat(document.getElementById("averageOrderValue").value);
var resultDiv = document.getElementById("result");
// Validate inputs
if (isNaN(adSpend) || adSpend <= 0) {
resultDiv.innerHTML = "Please enter a valid total ad spend greater than zero.";
return;
}
if (isNaN(revenueGenerated) || revenueGenerated < 0) {
resultDiv.innerHTML = "Please enter a valid revenue generated.";
return;
}
if (isNaN(conversionRate) || conversionRate 100) {
resultDiv.innerHTML = "Please enter a valid conversion rate between 0 and 100.";
return;
}
if (isNaN(averageOrderValue) || averageOrderValue = 0) {
resultHTML = "$" + roi.toFixed(2) + "% ROI";
resultDiv.style.backgroundColor = "var(–success-green)";
} else {
resultHTML = "$" + roi.toFixed(2) + "% ROI";
resultDiv.style.backgroundColor = "#dc3545"; // Red for negative ROI
}
resultHTML += "For every $" + adSpend.toFixed(2) + " spent, you earned $" + profit.toFixed(2) + " profit.";
resultDiv.innerHTML = resultHTML;
}