Marketing & agency
Facebook Ads ROI Calculator
Works social advertising return, where attribution is generous to itself.
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 attributed revenue, less spend and creative and management costs, divided by that total. Platform-attributed revenue uses the platform's own attribution model and window, which is generous toward the platform, so the reported figure is an upper bound rather than a measurement.
What moves the number
- Attribution model and window the platform applies.
- Gross margin on the revenue.
- Creative production and management cost.
- Incrementality, particularly on retargeting.
Where this one goes wrong
Platform-reported return counts conversions it had a plausible claim to, which means two platforms can each claim the same sale and the sum of attributed revenue can exceed actual revenue. Reconcile against total sales. Retargeting is the clearest incrementality problem, since it shows ads to people already intending to buy, and a holdout test is the only way to find out how much of that return is real.
Before you quote
- Reconcile attributed revenue against actual total sales.
- Run a holdout test on retargeting before trusting its return.
- Include creative production in the spend.
Questions
About this calculator
Can I trust platform-reported return?
As an upper bound rather than a measurement. The platform uses its own attribution model and window, which is generous to itself, and two platforms can each claim the same sale so the attributed totals can exceed actual revenue.
How do I check attribution?
Reconcile attributed revenue against actual total sales. If the platforms together claim more than the business sold, the attribution is overlapping, and the share each deserves has to be judged rather than accepted.
Is retargeting as profitable as it looks?
Usually less so, because it shows ads to people already intending to buy. It is the clearest incrementality problem in digital advertising, and a holdout test is the only reliable way to find out how much of the return is real.
The formula
payback = cost / (monthly gain - monthly running cost)
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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.