PPC Ecommerce ROI Calculator

Calculate the Return on Investment of your advertising campaigns with this simple to use Ecommerce Pay-Per-Click (PPC) ROI Calculator.

Simply enter the required data points and click calculate. You’ll get an overview of your campaign ROI, including a break-even benchmark of your Cost per Click (CPC) and Customer Acquisition Cost (CAC).

PPC Ad Campaign ROI Calculator

What was your ad spend?

How many ad clicks did you receive?

How many sales did you get?

What was the average order value (excl. VAT)?

What was the average gross profit margin (excl. VAT)?

gross profit = 100 * (revenue – costs / revenue)

What are the costs of your ad management (agency fees, if applicable)?

What is the campaign ROI?

ROI stands for Return on Investment. In ecommerce, it helps marketers to measure if their ad campaigns return the desired sales uplift or profit.

The ROI is usually expressed as a percentage, e.g., 400%, but can also be shown as a decimal 4 or ratio 1:4.

Tracking the ROI of your ad campaigns can help you gauge whether you need to improve the performance of your ad campaigns and how they compare with your industry’s average.

How to calculate the campaign ROI

The formula to calculate the return on investment of your ad campaign is simple: Just take the sales growth and subtract your ad campaign cost. Then, divide the result by your ad campaign cost.

Campaign ROI = (Sales Growth – Ad Campaign Cost) / Ad Campaign Cost

If your sales grow by $5,000 and you spend $500 in advertising, your ROI would be 900%. So for every $1 invested, you would make $9 in revenue.

Campaign ROI = ($5,000 – $500) / 500

However, if you sell products online, you may want to get a bit more granular. Why? Because the sales growth tells you nothing about your profits.

So if you want to know, whether your campaign actually returns a profit, let’s adjust the above formula a bit. But before we do that, keep in mind that:

  • Your sales growth is your revenue.
  • Your ad revenue equals your average order value.
  • Each order has an average profit margin (revenue – costs / revenue).

As such, you simply multiply your average order value times your average gross profit margin and divide that by your ad campaign costs1. The result is your ecommerce ad campaign ROI:

Ecommerce Ad ROI = (Avg. Order Value * Avg. Gross Profit Margin ) / Ad Campaign Cost – 1

If you don’t want to calculate all of this yourself, simply use my free and easy to use ecommerce ROI calculator above.

What is a good campaign ROI?

From a pure economically standpoint speaking, a ‘good’ campaign ROI is one that turns a profit. Any campaign ROI above 0% recovers your ad investment and returns your business a profit.

However, you might face additional operational expenses or costs from paying interest rates that are not taken into account in the above ROI calculator.

So if you are working with low net profit margins in your business, you might want to aim for a higher campaign ROI with a min. of 300%-400%.

What is CPC?

CPC stands for Cost per Click. It is a metric to measure how much you are paying for a click on your ad campaign. It is measured as total number of clicks divided by your total ad spend.

What is CAC?

CAC stands for Customer Acquisition Cost. It measures how much you have to spend to convert users into buyers. It is calculated by dividing the total conversions by the total ad spend.

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