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)?
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
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:
sales growthis your
ad revenueequals 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 costs –
1. 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.