ROI

ROI (return on investment) shows how much profit an investment generates relative to its cost. In marketing, it answers the question that matters most: are your campaigns actually making money?

Formula

ROI = (profit from investment − cost of investment) ÷ cost of investment × 100%

Profit here means contribution margin – revenue minus the cost of goods or delivery. Costs include not just ad spend but also agency fees, tools, content production and sales effort.

Example

An agency runs Google Ads campaigns for a client:

• Ad spend: $5,000
• Agency fees and tools: $2,000
• Revenue from closed deals: $25,000
• Margin: 40% → contribution margin $10,000

ROI = ($10,000 − $7,000) ÷ $7,000 × 100% = about 43%

In the same example, ROAS is 5 – sounds much better, but says nothing about profit.

ROI in lead generation

In lead generation, there are often weeks between the click and the revenue. A lead only becomes a customer in the sales process, and revenue shows up in the CRM or at the payment provider – not in the ad account. Without connecting the two, you can only estimate the ROI of a single campaign.

LeadMetrics attributes deals from HubSpot or Close and payments from Stripe, CopeCart or Digistore24 to the campaign the lead came from, and shows metrics such as revenue, profit and cost per deal. That way you see which campaigns are truly profitable. Use the free ROI calculator to run the numbers for your budget.

Common mistakes

• Counting only ad spend: Then you are really measuring ROAS, not ROI.
• Using revenue instead of profit: High revenue with thin margins can still mean a loss.
• Too short a time frame: With long sales cycles, ROI looks worse in the first weeks than it ends up being.
• Ignoring repeat purchases: If you leave out customer lifetime value, you underestimate the ROI of campaigns that bring in loyal customers.