Leave blank to calculate on gross revenue. Enter a margin for a result based on gross profit.
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Based on gross revenue. Enter a profit margin above for a result that accounts for cost of goods sold.
Improve your marketing ROIFrequently asked questions
What is marketing ROI and how is it calculated?
Marketing ROI measures the return you generate from marketing spend relative to what you invested. The basic formula is: ROI% = ((revenue generated minus marketing spend) divided by marketing spend) multiplied by 100. Spend £5,000 and generate £25,000 in revenue and your ROI is 400%. Entering a gross profit margin gives a more meaningful result because it bases the return on actual profit rather than gross revenue, which can look strong even when margins are thin.
What is a good marketing ROI?
A commonly cited benchmark is a 5:1 ratio (revenue to spend), which equates to an ROI of 400%. A 10:1 ratio (900%) is considered excellent for most channels. Below a 2:1 ratio (100% ROI), campaigns are unlikely to be profitable once overheads are factored in. The right benchmark depends heavily on your gross profit margin: a business with 20% margins needs a much higher revenue ROI to break even than one with 60% margins. Entering your margin into the calculator will give you a result that reflects your specific situation.
What is the difference between marketing ROI and ROAS?
ROAS (return on ad spend) is simply revenue divided by ad spend and tells you how much revenue you generated per pound spent. It does not account for the cost of goods sold, fulfilment or any other costs. ROI is a broader measure that uses gross profit rather than gross revenue. A campaign can show a strong ROAS but a poor ROI if margins are thin. Use ROAS to compare ad channels; use ROI to understand whether a campaign is actually profitable for the business.
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