Digital Marketing ROI Calculator
How to Use the Marketing ROI Calculator
Return on Investment (ROI) is the most critical metric for any digital marketing campaign. It measures the profit or loss generated relative to the amount of money invested. By using our calculator, you can forecast the viability of your Google Ads, Facebook Ads, or LinkedIn campaigns before spending a single dollar.
The Core ROI Formula
The standard formula used in this calculator is:
ROI = [(Gross Revenue – Marketing Spend) / Marketing Spend] x 100
Key Metrics Explained
- Monthly Ad Spend: The total budget allocated to your advertising platforms.
- Cost Per Click (CPC): The average amount you pay every time a user clicks your advertisement.
- Conversion Rate: The percentage of visitors who complete a desired action (like a purchase or lead form).
- Average Sale Value: The average dollar amount of a closed sale or customer lifetime value.
Strategic Examples
Example A (E-commerce): If you spend $1,000 at a $0.50 CPC, you get 2,000 clicks. At a 2% conversion rate, that results in 40 sales. If your average sale is $100, your revenue is $4,000. Your ROI would be 300%.
Example B (High-Ticket Lead Gen): If you spend $5,000 at a $5.00 CPC, you get 1,000 clicks. At a 1% conversion rate, you get 10 leads/sales. If each sale is worth $2,500, your revenue is $25,000. Your ROI would be 400%.
How to Improve Your ROI
To increase your profitability, you should focus on three main pillars: lowering your CPC through better ad relevance, increasing your website's Conversion Rate (CRO), or increasing your Average Order Value (AOV) through upselling and cross-selling.