Revenue is not profit.
Do the real math.
Enter your spend, the revenue you attribute to it, and your gross margin. The calculator returns ROAS, gross profit, profit after marketing spend, and true ROI percent, with revenue and profit kept strictly separate. Everything runs in your browser, nothing is collected, and the formulas are published below.
The calculator
Numbers update live as you type. Negative values are rejected automatically.
The distinction
that matters.
Revenue is what the customer paid you.
It is the top-line number: every dollar that came in the door. Agencies love it because it is always the biggest number on the page.
Profit is what you kept.
Revenue minus what it cost you to deliver the work (your gross margin), minus what you paid to win the business (your marketing spend). If profit is negative, the marketing lost money no matter how impressive the revenue looks.
Exactly what the
calculator does.
Four formulas, in this order. No hidden steps.
Return on ad spend: how many dollars of revenue each dollar of spend produced. A 3.5 means $3.50 of revenue per $1 of spend. This is a revenue metric. It says nothing about profit.
The part of revenue you actually keep after delivering the product or service. Margin is entered as a decimal (50% becomes 0.50).
The dollars left after both delivery costs and marketing costs are paid. Positive means the marketing paid for itself; negative means you paid to lose money.
Net profit expressed as a percent of the spend that created it. 75% means every dollar of marketing returned 75 cents of profit on top of getting the dollar back.
Real numbers,
step by step.
Inputs: $10,000 monthly spend, $35,000 attributed revenue, 50% gross margin.
3.50x. Sounds great on a slide.$17,500.00. Half the revenue went to delivering the work.$7,500.00. This is what the marketing actually earned.75.0%. Profitable: every marketing dollar came back with 75 cents of profit attached.What this tool
does not do.
- Attribution is your claim, not a fact. The revenue you enter is taken at face value. If organic demand, referrals, or repeat buyers are mixed into it, the ROI is overstated.
- Ignores lifetime value. A customer acquired this month may buy again for years. This calculator measures one period only; add repeat revenue separately if you want the full picture.
- Ignores overhead. Rent, payroll, and tools are outside the formulas. Profit here means profit after marketing spend, not net profit of the business.
- Timing is flattened. This month's spend often buys next month's revenue. If your sales cycle is long, run the calculator over the full cycle, not calendar months.
- Margin is treated as constant. In reality margin moves with pricing, mix, and scale. If yours moves a lot, use a conservative (lower) margin.
- Revenue collection assumed. The math assumes attributed revenue is actually collected. Unpaid invoices and refunds would lower every number downstream.
Before you
ask.
ROAS measures revenue against spend: $35,000 in revenue on $10,000 of spend is 3.5x ROAS. It ignores your costs, so it always looks good. ROI measures profit against spend: if that $35,000 carries a 50% margin, gross profit is $17,500, net after spend is $7,500, and ROI is 75%. Agencies report ROAS because it is bigger. Owners should manage ROI because it is real.
Any ROI above 0% means the marketing paid for itself; below 0% means you paid to lose money. There is no universal target because payback timing and lifetime value differ by business. What matters is that ROI is positive, measured on profit (not revenue), and stable over time.
Because revenue is what the customer paid you, and profit is what you kept. A $35,000 month on $10,000 of spend looks like a 250% return until you remember you also paid to deliver the work. At a 50% margin, only $17,500 of that revenue is yours to measure against the $10,000 spend, which is a 75% ROI. Mixing the two up is the most common way marketing math lies.
Three usual suspects. First, attribution: revenue you typed in may not have been caused by the spend (organic demand, referrals, or repeat buyers mixed in). Second, timing: this period's spend often buys next period's revenue. Third, overhead: rent, payroll, and tools sit outside this calculator. Profit here means profit after marketing spend, not net profit of the business.
Want a second set of eyes
on your numbers?
Bring your real spend and your real margins. We'll tell you straight.