The Marketing ROI Formula
Marketing ROI = (revenue × gross margin − campaign cost) / campaign cost × 100
The revenue figure depends on attribution. Decide up front whether you count revenue from deals the campaign sourced, influenced, or both, and write the rule next to the number. Two people calculating ROI for the same campaign with different attribution rules will get different answers and both will be right.
Worked Example
Illustrative numbers: an ABM program costs 30,000 in a quarter (ads, a direct mail piece, agency time and a share of two marketers' salaries). Deals sourced by the program close for 90,000. At an 80% gross margin, gross profit is 72,000 and ROI is 140%. Revenue-based ROI would show 200%, which is the number that tends to end up in slide decks and gets challenged by finance.
Getting a Number You Can Defend
- Use a control where you can. For website changes, a holdout group is the cleanest way to separate what the campaign caused from what would have happened anyway. See how to measure personalization ROI with holdout groups.
- Report pipeline before revenue. For long B2B cycles, pipeline ROI is available in weeks and closed-revenue ROI in quarters.
- Separate ROI from ROAS. Use the ROAS calculator for ad efficiency and this calculator for the business case.
If you need a structured way to present the number to leadership, the personalization ROI scorecard lays out inputs, assumptions and results on one page.
Frequently Asked Questions
How do you calculate marketing ROI?
Subtract the campaign cost from the gross profit the campaign produced, then divide by the campaign cost. 72,000 in gross profit from a 30,000 campaign is an ROI of 140%.
Should marketing ROI use revenue or profit?
Profit. Revenue-based ROI ignores the cost of delivering what you sold and overstates the return, especially for low-margin businesses. The calculator shows both so you can see the gap.
What costs go into a campaign's cost?
Media, creative and content production, agency fees, tools used only for the campaign, and a fair share of the time of the people who ran it. Leaving out people's time is the most common reason marketing ROI looks better on paper than in the P&L.
How is marketing ROI different from ROAS?
ROAS divides revenue by ad spend only. ROI uses profit and the full cost. A campaign can show a 4x ROAS and still lose money once margin and people costs are included.
How do I measure ROI for website personalization?
Keep a holdout group that sees the default site, compare pipeline per visitor between the groups, and attribute only the difference to personalization. Our guide on measuring personalization ROI walks through it.