Sales and growth
Marketing ROI calculator
See whether a campaign or channel is paying its way: ROI, ROAS, cost per lead and break-even.
Compare what a campaign cost with the gross profit it brought in. You get marketing ROI, return on ad spend, cost per lead and customer, conversion rate and how many customers you need to break even.
You will need
- What the marketing cost
- Leads and customers it produced
- Average sale value and gross margin
What you enter
- Marketing spend – Everything the campaign or channel cost in the period: ad spend, agency fees, content, tools. Ex GST.
- Leads or enquiries generated – Optional. Used for cost per lead and conversion rate.
- New customers won – Customers you can attribute to this marketing.
- Average sale value (ex GST) – Average revenue from one purchase.
- Gross margin – Share of each sale you keep after direct costs. ROI uses profit, not revenue.
- Purchases per customer to count – How many purchases from each new customer to credit to this marketing.
How it is calculated
Revenue = Customers × Average sale × Purchases per customer. Gross profit = Revenue × Gross margin. Marketing ROI = (Gross profit − Spend) ÷ Spend × 100. Return on ad spend (ROAS) = Revenue ÷ Spend. Cost per customer = Spend ÷ Customers. Break-even customers = Spend ÷ (Average sale × Gross margin × Purchases per customer), rounded up.
Assumptions
- All customers counted were won because of this marketing (attribution is up to you).
- ROI is calculated on gross profit, so it is lower than a revenue-based "return on ad spend".
- Amounts exclude GST.
Limitations
- It ignores brand awareness and customers who buy later without being tracked.
- Counting many repeat purchases can flatter a campaign; compare like with like.