Free tool
Marketing ROI & Budget Calculator
Compare extra advertising budgets and the projected return on each.
This marketing ROI and advertising budget calculator shows what three extra ad budgets could contribute after their cost, and the projected percentage return on that spend. Enter a budget for each band and your estimate of the cost to acquire an added customer. Band budgets can be different sizes.
The cost of the next customers may differ from your current average. This tool cannot predict that cost. It uses the estimates you enter, together with first-order and expected repeat contribution over the same number of months. Compare the bands to see which assumptions leave money after extra ads and which lose it.
Three entered extra budgets · Your cost-per-customer estimates · One shared period
Current period
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Customer economics
Additional spend band 1
Additional spend band 2
Additional spend band 3
What’s different about this calculator
See whether each extra block of ad spending is expected to pay for itself.
| Basic calculation | What this adds |
|---|---|
| One average acquisition cost | Tests three spending blocks, each with its own expected cost per new customer |
| Contribution from the first order | Adds repeat-order contribution over the number of months you choose |
| Contribution from the total budget | Shows what each spending block adds or loses, including an expensive later block |
How this tool works
From extra budget to added contribution
1. Find contribution per added customer
Deduct first-order costs, then include expected repeat contribution within your horizon.
Customer contribution = first-order net revenue − product cost − other variable costs + repeat orders × repeat contribution
Example: $100 − $35 − $15 + 0.5 × $20 leaves $60 per added customer before ads.
2. Estimate customers in each band
Give each additional budget its own marginal CAC assumption.
Added customers = band spend ÷ assumed marginal CAC
Example: a $6,000 band at $40 CAC adds 150 modeled customers. Fractional counts remain in the calculation.
3. Subtract the additional ad spend
Multiply added customers by their contribution, then deduct that band’s budget once.
Band contribution after ads = added customers × customer contribution − band spend
Example: 150 × $60 − $6,000 leaves $3,000 after the first band’s ads.
4. Add the bands together
The total includes each entered additional band. Current spending stays separate as context.
Total added contribution = band 1 contribution + band 2 contribution + band 3 contribution
Example: $3,000 + $0 − $2,000 leaves $1,000 after $20,000 extra ad spend. This is a scenario, not a recommended budget.
5. Calculate the return on extra marketing spend
Projected incremental marketing ROI = added contribution after extra marketing ÷ additional marketing spend × 100
Example: $1,000 ÷ $20,000 × 100 = 5%. The bands return 50%, 0% and −25%, respectively. The combined 5% uses total added contribution divided by total added spend; it is not the average of the three percentages. Zero spend leaves the percentage undefined.
Use matching marketing costs in each band’s spend and marginal CAC. This scenario includes entered product and variable order costs, then deducts extra marketing once. It excludes fixed overhead, tax and omitted costs and does not establish what marketing caused.
Questions & answers
Understanding your result
How is marketing ROI calculated here?
Projected incremental marketing ROI = contribution after additional marketing spend ÷ additional marketing spend × 100. Contribution includes entered product and variable order costs and expected repeats within your chosen horizon. A $10,000 budget leaving $4,000 after its marketing cost has a 40% projected ROI. Include all extra marketing costs for those customers in the band budget and use the same included-cost basis for marginal CAC. This is not company net profit or measured attribution; ROAS is revenue divided by ad spend.
What do zero or negative ROI results mean?
A 0% projected ROI means the entered contribution covers the additional marketing spend exactly, before fixed overhead and omitted costs. A negative ROI means it does not cover that spend. With zero spend the ROI percentage is undefined, rather than 0%. Negative customer contribution can produce a return below −100%.
How do I calculate an advertising budget for growth?
Start with an explicit budget scenario and estimate the CAC of the customers added at that level. Compare the resulting first-order and horizon-limited repeat contribution with the extra spend. This tool helps test those inputs; it does not infer the best budget from current revenue.
Why does each spend band have its own CAC?
Marginal CAC describes the cost of customers added by that band, while current average CAC describes the customers already acquired. Audience reach, channel mix, creative and auction conditions may change as spend grows. Enter the assumptions you want to test rather than extending one average automatically.
How should I enter repeat orders per customer?
Use the average across all newly acquired customers within the stated horizon, including customers with no repeat order. Keep repeat contribution after its variable costs and before acquisition spend. Do not use repeats per repeat buyer as though every new customer will repeat.
Does positive modeled contribution mean I can afford the budget?
It means the entered contribution assumptions exceed the modeled acquisition spend. It does not establish the timing of cash receipts, stock funding, fixed costs or the likelihood of the assumptions. Check the cash commitment and operational capacity separately before increasing spend.