How do I calculate advertising ROI?

Subtract your spend from your revenue, divide the result by the spend, and multiply by 100. A $1,000 spend returning $1,500 is a 50% ROI.

What is the difference between ROI and ROAS?

ROAS is revenue divided by spend and never subtracts the cost, so break-even is 1.0x. ROI subtracts the cost first, so break-even is 0%. A 3.0x ROAS is the same campaign as a 200% ROI.

What is a good ROI for affiliate traffic?

Most buyers treat 20% to 30% as a working campaign and anything under 10% as too thin to survive normal traffic variance. What matters more is the margin of safety: a 15% ROI with a wide CPA buffer outlives a 40% ROI with none.

What is break-even CPA?

The most you can pay to acquire one conversion without losing money - which is exactly your revenue per conversion. Bid above it and every conversion costs you money.

What is the margin of safety?

How far your actual CPA can rise before it reaches break-even, as a percentage. It is the single best early-warning number on a campaign, because CPA drifts upward long before ROI turns negative.

Should I include my own costs in revenue?

Enter gross revenue from the advertiser and keep your own overheads out, then treat the profit line as gross profit. If you want a net view, subtract your costs from revenue before entering it.

ROI Calculator

Enter what you spent and what came back, and see profit, ROI, ROAS, your real CPA and the two break-even points that decide whether a campaign survives. The margin of safety tells you how far your CPA can drift before the campaign turns negative - the number most ROI calculators leave out.

Load a GEO click price

Recalculates the clicks your spend buys at that GEO average push CPC. Every figure stays editable.

Ad spend

Everything you paid the traffic source over the period.

Revenue

Everything the campaign paid back, before your own costs.

ROI

Return on investment. Leave this to be solved, or type a target and the revenue it needs is solved instead.

Conversions

Leads, deposits, sales - whatever your advertiser pays for.

Clicks

Clicks bought. Used for your CPC, profit per click and break-even conversion rate.

Enter any two of spend, revenue and ROI - the third is solved automatically. Set a target ROI and the revenue you need appears.

How the campaign performed

$1,000.00 of spend returning $1,500.00 is $500.00 of profit - an ROI of 50% and a ROAS of 1.50x. Every dollar spent came back with $0.50 on top.

You break even at a $25.00 CPA or a 0.26% conversion rate. Your CPA is $16.67, so it can drift 33.3% before this campaign stops making money.

Unit economics and break-even

Profit: $500.00
ROAS: 1.50x
Actual CPA: $16.67
Revenue per conversion: $25.00
Profit per click: $0.032
Break-even CPA: $25.00
Break-even conversion rate: 0.26%
Margin of safety on CPA: 33.3%

ROI, ROAS and the margin of safety

ROI and ROAS answer the same question in different units. ROAS is revenue divided by spend, so 1.5x means every dollar came back as a dollar fifty. ROI subtracts the spend first and expresses the remainder as a percentage, so the same campaign is a 50% ROI. Break-even is 1.0x ROAS and 0% ROI - if a report quotes 100% ROI, check which of the two they mean before you celebrate.

Neither number tells you whether the campaign is safe. That is what break-even CPA and break-even conversion rate are for. Break-even CPA is simply your revenue per conversion: pay more than that to acquire one and you lose money on every single conversion. Break-even conversion rate is your CPC divided by that payout - the minimum share of clicks that must convert to keep the campaign alive.

The margin of safety is the gap between the two, expressed as a percentage. A campaign running at a $17 CPA against a $25 break-even has 33% of room: costs can rise a third before it goes underwater. A campaign at 3% has none, and one bad traffic day will take it out. Media buyers who last optimise the margin, not the ROI.

The ROI formula

Profit = revenue - spend
ROI % = ((revenue - spend) / spend) x 100
ROAS = revenue / spend
Break-even CPA = revenue / conversions
Break-even CR % = (CPC / break-even CPA) x 100
Margin of safety % = ((break-even CPA - actual CPA) / break-even CPA) x 100

ROI calculator FAQ

How do I calculate advertising ROI?: Subtract your spend from your revenue, divide the result by the spend, and multiply by 100. A $1,000 spend returning $1,500 is a 50% ROI.
What is the difference between ROI and ROAS?: ROAS is revenue divided by spend and never subtracts the cost, so break-even is 1.0x. ROI subtracts the cost first, so break-even is 0%. A 3.0x ROAS is the same campaign as a 200% ROI.
What is a good ROI for affiliate traffic?: Most buyers treat 20% to 30% as a working campaign and anything under 10% as too thin to survive normal traffic variance. What matters more is the margin of safety: a 15% ROI with a wide CPA buffer outlives a 40% ROI with none.
What is break-even CPA?: The most you can pay to acquire one conversion without losing money - which is exactly your revenue per conversion. Bid above it and every conversion costs you money.
What is the margin of safety?: How far your actual CPA can rise before it reaches break-even, as a percentage. It is the single best early-warning number on a campaign, because CPA drifts upward long before ROI turns negative.
Should I include my own costs in revenue?: Enter gross revenue from the advertiser and keep your own overheads out, then treat the profit line as gross profit. If you want a net view, subtract your costs from revenue before entering it.

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