Marketing & agency
Agency Digital Marketing ROI Calculator
Works return on digital marketing for a client, where the reporting basis matters.
Result
Simple payback, with no discounting and no financing cost. For anything large or long, money now is worth more than money later and a lender will want interest, both of which make the real return lower than this.
Get a Free Business AuditHow the calculation works
Gross margin on revenue attributable to the activity, less the media spend and the agency fee, divided by that total. Including the fee is what makes this a client's return rather than a media performance figure, and it is the figure the client should be shown.
What moves the number
- Media spend plus the agency fee.
- Client's gross margin, not revenue.
- Attribution model and window.
- Incrementality of the attributed revenue.
Where this one goes wrong
Reporting return on media spend while excluding the fee overstates what the client received and is the practice that erodes trust when the client eventually calculates it themselves. Include the fee. Using the client's gross margin rather than revenue is the other requirement, and it means asking for the margin, which an agency that has never asked should be slightly uncomfortable about.
Before you quote
- Include the agency fee in the spend figure.
- Use the client's gross margin, which means asking for it.
- State the attribution model and window used.
Questions
About this calculator
Should the agency fee be in the return calculation?
Yes, for it to be the client's return rather than a media performance figure. Excluding it overstates what the client received, and it erodes trust badly when the client eventually calculates it themselves.
Why use the client's margin?
Because revenue overstates return by the whole cost of delivery. It means asking the client for their margin, which an agency that has never asked should find slightly uncomfortable, since it is the number that determines whether the work pays.
How should attribution be presented?
With the model and window stated, so the client knows what the figure rests on. Presenting platform-attributed revenue as measured fact is the practice that causes the most trouble when a client reconciles it against actual sales.
The formula
payback = cost / (monthly gain - monthly running cost)
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Up-front cost ($). Enter your own figure; the page starts at $12,000.
- Extra gross profit per month ($). Enter your own figure; the page starts at $1,400.
- Extra running cost per month ($). Enter your own figure; the page starts at $220.
- Period to judge it over. Enter your own figure; the page starts at 36.
The result updates as you type, so you can try a figure, see what it does to payback period, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Up-front cost | $12,000 |
| Extra gross profit per month | $1,400 |
| Extra running cost per month | $220 |
| Period to judge it over | 36 |
What comes out
| Result | Value |
|---|---|
| Payback period main result | 10.2 |
| Net gain per month | $1,180 |
| Net return over the period | $30,480 |
| Return on investment | 254% |
It pays for itself in 10.2 months and returns $30,480 over 36 months, a 254% return.
How sensitive the answer is
Holding everything else steady and changing only up-front cost, this is what happens to payback period. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Up-front cost ($) | Payback period |
|---|---|
| $6,000 | 5.1 |
| $9,000 | 7.6 |
| $12,000 example above | 10.2 |
| $18,000 | 15.3 |
| $24,000 | 20.3 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Up-front cost ($)
- A money amount, starting at $12,000.
- Extra gross profit per month ($)
- A money amount, starting at $1,400.
- Extra running cost per month ($)
- A money amount, starting at $220.
- Period to judge it over
- A number, between 0 and 240, starting at 36.
What the results tell you
| Result | What it is |
|---|---|
| Payback period | The headline result. A decimal figure. |
| Net gain per month | A money figure. |
| Net return over the period | A money figure. |
| Return on investment | A percentage. |
Attribution is the weak link
Return and cost-per-lead figures depend on knowing which enquiries came from which source, and most home-services businesses do not track that reliably. If the source data is guesswork, so is the return.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.