About the Digital Marketing ROI Calculator
Before launching a PPC (Pay-Per-Click) or display advertising campaign, it is crucial to understand your projected metrics. This Digital Marketing Campaign Calculator helps SEOs, media buyers, and business owners estimate the profitability of their ad spend based on standard industry metrics like CPM, CTR, and Conversion Rate.
Whether you are running ads on Google, Facebook, LinkedIn, or Programmatic Display, understanding the relationship between your budget and your outcome is key to scaling your business effectively.
How the Calculations Work
This tool uses a standard funnel logic to determine your results:
- Impressions: Calculated by dividing your Budget by your CPM (Cost Per Mille) and multiplying by 1,000. This represents how many eyes see your ad.
- Clicks: Derived by multiplying your total Impressions by your CTR (Click-Through Rate). This is the traffic driven to your landing page.
- Conversions (Leads/Sales): Calculated by applying your Conversion Rate to the number of Clicks.
- ROAS (Return on Ad Spend): The ratio of Revenue generated to the total Ad Budget. A ROAS of 300% (or 3.0) means you earn $3 for every $1 spent.
Understanding the Key Metrics
To get the most accurate results, you should input data based on historical performance or industry benchmarks:
- CPM (Cost Per 1,000 Impressions): Display ads often range from $2-$10, while premium video ads can exceed $20.
- CTR (Click-Through Rate): A healthy CTR for display is often 0.1% – 0.5%, while search ads can see 2% – 5% or higher.
- Conversion Rate: This varies wildly by industry, but 2% – 5% is a common benchmark for optimized landing pages.
Why is Cost Per Lead (CPL) Important?
Your Cost Per Lead (CPL) dictates the sustainability of your campaign. If your CPL is higher than your customer lifetime value (LTV) or your immediate profit margin, the campaign is losing money regardless of the volume of leads generated. Use this calculator to find your "Break-Even CPL" by adjusting the inputs until your ROAS turns positive.
Example Scenario
Imagine you have a $5,000 budget for a LinkedIn campaign. The CPM is $20, and you expect a 0.8% CTR. If your landing page converts at 4% and each lead is worth $300:
The calculator would show you generate roughly 250,000 impressions, resulting in 2,000 clicks. From those clicks, you would get 80 leads. With a CPL of $62.50 and a lead value of $300, your total revenue would be $24,000, yielding a massive 480% ROAS.