Formula
Marketing ROI = (Incremental revenue − Marketing cost) ÷ Marketing cost × 100Marketing ROI in plain English
Marketing ROI compares the net return from an activity with its cost. If $10,000 of marketing cost produces $30,000 of incremental revenue, the simplified ROI is (30,000 − 10,000) ÷ 10,000 = 200%.
Revenue is not always return
For a contribution-based view, replace incremental revenue with incremental gross profit. That adjustment prevents low-margin revenue from making a campaign appear more profitable than it is.
Attribution caution
The difficult input is incremental impact: what would have happened without the marketing activity? Platform attribution, controlled experiments and blended business trends answer different questions. Document the method used whenever ROI is reported.
Assumptions
- Incremental revenue is genuinely attributable to marketing.
- The calculation does not deduct cost of goods unless included in marketing cost.
Sources and methodology
CalcMotive publishes the formula and assumptions so you can decide whether the estimate fits your use case. See our methodology standards.