The ROI formula
ROI = (total return − total investment) ÷ total investment × 100. Spend $6,000 on a campaign that brings in $18,000 and your ROI is 200%: every dollar came back with two more.
The hard part is never the math. It is deciding what counts as return and what counts as cost. For marketing, count the full cost (ad spend, tools, agency fees and the hours your team put in) and count only revenue you can reasonably attribute to the work. Inflated inputs give you a number that looks great in a deck and fails in a budget review.
Why annualized ROI matters
A 50% return in three months beats a 100% return over two years. Raw ROI hides that. Annualized ROI converts any time period to a yearly rate using compounding: (return ÷ cost)^(12 ÷ months) − 1. Use it whenever you compare channels or experiments that ran for different lengths of time.
What is a good marketing ROI?
A common rule of thumb for marketing is 5:1 revenue to cost, which is a 400% ROI. Anything under 2:1 usually loses money once cost of goods and overhead come out. Treat these as starting points: a SaaS company with 80% gross margin can live with a lower revenue ROI than an ecommerce store at 30% margin. If you know your margin, the ROAS calculator gives you an exact break-even point.
Frequently asked questions
How do I calculate ROI?
Subtract the investment from the total return, divide by the investment, and multiply by 100. $18,000 return on $6,000 spent is (18,000 − 6,000) ÷ 6,000 × 100 = 200% ROI.
What is the difference between ROI and ROAS?
ROAS divides revenue by ad spend only and is shown as a multiple, like 4x. ROI subtracts the full cost first and is shown as a percentage, so it reflects profit rather than revenue.
Can ROI be negative?
Yes. If the return is smaller than the investment, ROI is negative. −25% means you recovered 75 cents of every dollar spent.
Is my data stored?
No. The calculator runs entirely in your browser. Nothing you type is sent to a server.