How to calculate the ROI of an ad campaign: formula and example

"Did the ads pay off?" is the main question for a business. To answer it in numbers, not gut feeling, you need to calculate ROI. Let's break down the formulas in plain words and with an example.

What ROI and ROMI are

ROI (return on investment) is the payback of investment in general. ROMI is the same but specifically for marketing spend. The formula:

ROMI = (Revenue from ads − Ad spend) ÷ Ad spend × 100%

If it's above 0% — the ads are in the black; below — in the red.

A calculation example

You spent $3,000 on a campaign, and it brought $7,500 in sales.

ROMI = ($7,500 − $3,000) ÷ $3,000 × 100% = 150%.

That is, for every dollar invested you earned $1.50 on top. Sometimes it's handier to use ROAS — revenue per ad dollar: $7,500 ÷ $3,000 = 2.5.

Common mistakes

• Counting by revenue, not profit. If the margin is low, a 150% ROMI on revenue can be a loss on profit. Use margin profit.
• Ignoring delayed sales. Some customers don't buy right away — a short window understates the result.
• Not accounting for LTV. Ads may be "in the red" on the first purchase but in the black on repeats.
• No tracking. Without UTM and promo codes you can't tell which campaign brought the money.

How to calculate correctly

Tag traffic, use margin profit, look over a sufficient window and account for repeat purchases. Then ROI reflects reality, not a random snapshot.

Takeaway

ROI/ROMI turn marketing from "like it / don't like it" into manageable numbers. We build campaign analytics so the real payback of each channel is visible.