How to calculate ROI
ROI = (profit from the investment − cost of the investment) ÷ cost of the investment × 100
If a campaign costs 20,000 kr and brings in sales with a gross profit of 50,000 kr, the ROI is (50,000 − 20,000) ÷ 20,000 × 100 = 150%.
ROI vs ROAS
Return on ad spend (ROAS) divides revenue by ad cost and ignores other costs and margins. ROI uses profit and all the costs involved, so it shows whether marketing actually makes money. A campaign with a ROAS of 3 can still have a negative ROI if margins are thin.
Measuring marketing ROI
- Track conversions and revenue per channel with analytics and conversion tracking.
- Include all the costs: ad spend, agency fees, tools and staff time.
- Use profit rather than revenue, and consider customer lifetime value for repeat business.
- Give channels such as SEO and content enough time: they cost money up front and pay back over months or years.
Estimate the return on an ad budget with our free Ads ROI calculator.