Marketing & agency
Google Ads ROI Calculator
Works search advertising return, where the conversion definition decides it.
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 from search-attributed conversions, less the spend and management cost, divided by that total. The conversion definition matters more here than in most channels, because search platforms will happily optimise toward whatever action is reported and a loose definition produces volume rather than customers.
What moves the number
- What conversion is reported back to the platform.
- Gross margin on the revenue produced.
- Management and creative cost.
- Branded against non-branded performance.
Where this one goes wrong
Reporting a weak conversion action back to the platform teaches it to find people who take that action rather than people who buy, which is how campaigns produce a growing number of worthless conversions. Report the action that has value. Separating branded from non-branded performance is the other essential cut, since branded traffic flatters the overall figure and tells you nothing about whether the campaign is generating demand.
Before you quote
- Report a conversion action with real value to the platform.
- Separate branded from non-branded performance.
- Include management cost in the spend.
Questions
About this calculator
Why do my conversions rise while sales do not?
Because the platform optimises toward whatever conversion you report. A weak action teaches it to find people who take that action rather than people who buy, which produces a growing number of worthless conversions.
Why separate branded from non-branded?
Because branded traffic largely existed anyway and flatters the overall figure. Separating them shows whether the campaign is generating demand or capturing it, and only the first justifies most of what gets spent.
What should be in the spend figure?
Media plus management and creative production. A return calculated on media alone ignores real costs of running the campaign, and in a managed account the management fee can be a meaningful share.
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.