The marketing ROI formula
Marketing ROI % = ((Gross profit from campaign − Campaign cost) ÷ Campaign cost) × 100
Use gross profit (revenue × margin), not revenue. Include media, agency, creative and tooling in the cost.
Worked example — £6,000 Google Ads test
A plumbing firm spends £6,000 over 3 months on Google Ads. Attributed jobs add £4,200 net profit per month for the next 12 months (because the customers keep coming back).
- Payback: ~1.4 months
- Total ROI (12 mo): +740%
- Annualised: ~740% per year
Brand vs performance
Performance marketing (search, retargeting) usually pays back in weeks. Brand (SEO, PR, content) pays back in months but compounds. Use a 24- or 36-month horizon for brand to avoid undervaluing it.