How do you calculate marketing ROI for a campaign?

• A. (Revenue attributed minus marketing costs) divided by marketing costs
• B. Revenue attributed divided by marketing costs
• C. (Marketing costs minus Revenue attributed) divided by Revenue attributed
• D. (Revenue attributed plus marketing costs) divided by marketing costs

Answer: (A)

Marketing ROI measures how much profit a campaign generates for every dollar spent. The best way to capture that profitability is to look at net profit from the campaign and compare it to the cost of the campaign. Net profit is the revenue attributed to the campaign minus the marketing costs. So the calculation is (Revenue attributed − Marketing costs) ÷ Marketing costs. This shows how many dollars of profit you gain for each dollar spent, usually expressed as a percentage.

For example, if a campaign brings in $120,000 in revenue and you spent $30,000, ROI = ($120,000 − $30,000) ÷ $30,000 = $90,000 ÷ $30,000 = 3, or 300%. Using just revenue divided by costs would ignore the costs and misrepresent profitability; subtracting in the numerator or adding instead of subtracting would also distort the true return.