Free tool
Marketing ROI Calculator
A ROAS of 7.5 can hide a 200 % ROI or a straight loss. The difference comes down to one number: your margin.
Marketing ROI is the ratio of profit produced by a marketing action to its cost. You get it by subtracting the cost from the margin the action generated, then dividing by that cost. Unlike ROAS, it reasons in margin rather than revenue.
What your campaign brought in
How ROI is calculated
Margin generated = Revenue × Gross margin ROI = (Margin generated − Cost) ÷ Cost × 100 ROAS = Revenue ÷ Cost
45,000 € of revenue at 40 % margin gives 18,000 € of margin. Against 6,000 € of cost, ROI is 200 %: every euro invested returned two on top of paying for itself. ROAS, meanwhile, reads 7.5.
Those two numbers describe the same campaign and do not say the same thing. ROAS ignores margin, so it stays identical whether you sell at 40 % or at 8 %. At 8 %, the same campaign produces 3,600 € of margin against 6,000 € of cost: an ROI of −40 %, while ROAS has not moved a tenth of a point.
What changes the result
- The cost perimeter. Media alone, or media plus creative plus services? Both are defensible, but an ROI computed on media alone does not compare to a full one.
- The margin you use. Gross margin gives a steering ROI; net margin gives an accounting ROI, always lower. Pick one and keep it.
- Incrementality. Attributed revenue contains sales that would have happened anyway, especially on brand campaigns. The most honest ROI is measured against a period or a region with no advertising.
Frequently asked questions
How do you calculate marketing ROI?
Multiply revenue generated by your gross margin, subtract the cost of the action, then divide by that cost. For 45,000 € at 40 % margin and 6,000 € of cost: (18,000 − 6,000) ÷ 6,000 = 200 %.
ROI or ROAS, which should I use?
ROAS for day-to-day steering inside the platform, because it reads live. ROI for budget decisions, because it carries margin. A campaign can show a good ROAS and a negative ROI: that happens as soon as margin falls below the inverse of the ROAS.
Does a 0 % ROI mean the campaign failed?
It means it paid for itself exactly. That is not a failure if it also brought repeat customers: first-order ROI ignores lifetime value, which the LTV calculator puts back in.
Good ROAS but profitability not following?
That is the symptom of steering on revenue in a business that is decided on margin. It gets fixed in conversion values, not in bids.
Make My Campaigns Profitable
Growth partner
Positioning, acquisition, innovation: together we build a lasting growth system.
Théo MaupiléFreelance Paid Media
Google PartnerSuperMalter
