ROI Calculator for Digital Advertising
Before investing in digital advertising, calculate your expected return on investment. This framework helps you evaluate Google Ads, Meta Ads, and other channels against your business metrics.
The Digital Advertising ROI Formula
ROI = ((Revenue Generated – Advertising Cost) / Advertising Cost) × 100
Key Variables to Know
- Average Customer Lifetime Value (CLV)
- Your website's conversion rate (leads generated per 100 visitors)
- Your sales team's close rate (percentage of leads that become customers)
- Average cost per click (CPC) for your target keywords or audience
- Your target cost per acquisition (CPA)
Example Calculation
Budget: $2,000/month | CPC: $5 | Clicks: 400 | Conversion rate: 5% | Leads: 20 | Close rate: 25% | New clients: 5 | Client value: $1,500 | Revenue: $7,500 | ROI: 275%