What this tool helps you decide
Evaluate whether attributed campaign sales leave enough contribution to cover acquisition activity. This is useful for an owner comparing channels or a marketer preparing a budget discussion: revenue efficiency and profitability answer different questions.
How to use it
- Use advertising spend for the same campaign and reporting window as the attributed revenue. Revenue should exclude GST and refunds so pass-through tax and reversed sales do not inflate performance.
- Enter contribution margin before marketing, after the variable costs of delivering those sales. If advertising is already deducted in your margin calculation, remove it there before entering it separately here.
- Include relevant agency, creative or other marketing costs once. The tool assigns all entered costs to the entered leads and new customers; split mixed retention and acquisition activity into separately allocated scenarios.
- Use new customers, not orders or the entire customer base, for CAC. Keep a saved scenario before changing one input; compare margin or cost allocation as well as headline revenue.
Understanding the results
ROAS divides revenue by ad spend. ROI divides contribution after all entered marketing costs by those marketing costs. A 5× ROAS is not a 500% profit margin or evidence that a campaign is profitable.
CPL and CAC divide the same total entered marketing costs by leads and new customers respectively. If the denominator is zero, the corresponding metric is unavailable rather than free acquisition.
Break-even ROAS assumes margin, advertising spend and other costs remain as entered. It is a scenario threshold, not a forecast that additional spending will produce proportional sales. Attribution windows, organic demand and repeat purchases can distort comparisons.
FOLLOW THE NUMBERS
A worked example
This fixed example is separate from your live inputs. It uses the editable defaults.
- ₹50,000 revenue × 40% margin = ₹20,000 contribution before marketing. Advertising ₹10,000 plus other costs ₹5,000 totals ₹15,000.
- ₹20,000 − ₹15,000 = ₹5,000 contribution after marketing. ROI is ₹5,000 / ₹15,000 = 33.33%; revenue ROAS is ₹50,000 / ₹10,000 = 5×.
- 100 leads give ₹150 CPL; 20 customers give ₹750 CAC. Break-even ROAS is ₹15,000 / (₹10,000 × 40%) = 3.75×.
| Measure | Example value |
|---|---|
| Contribution after marketing | ₹5,000.00 |
| Revenue ROAS | 5× |
| Marketing ROI | 33.33% |
| Contribution before marketing | ₹20,000.00 |
| Total marketing costs | ₹15,000.00 |
| Cost per lead | ₹150.00 |
| Customer acquisition cost | ₹750.00 |
| Break-even ROAS | 3.75× |
Common business scenarios
A high-ROAS marketplace campaign
Check whether product, fulfilment and return costs reduce contribution enough to absorb the apparent revenue gain. The default 5× ROAS becomes loss-making if the pre-marketing margin falls to 20%.
A service business buying leads
Include the relevant acquisition work and measure actual new customers. Low CPL with poor conversion can still create high CAC.
Comparing two channels
Use consistent revenue windows and cost boundaries. A platform-reported sale counted by both channels should not be credited twice in the combined business view.
Assumptions and limitations
This is not net business profit unless every relevant cost has been included. Rent, financing costs and general overhead may remain outside the campaign calculation.
Revenue attribution is supplied by you. The calculator does not prove incremental lift, correct platform tracking or reconcile multi-touch attribution.
Frequently asked questions
Why is ROI lower than ROAS?
ROI incorporates margin and other marketing costs. ROAS only compares revenue to advertising spend.
What if no customers were acquired?
CAC is unavailable rather than zero because the denominator is zero.
Can high ROAS coexist with a loss?
Yes. At ₹50,000 revenue, ₹10,000 ad spend and ₹5,000 other marketing costs, ROAS is 5×. With only a 20% contribution margin, contribution after marketing is negative ₹5,000.
Should GST be included in attributed revenue?
Use revenue excluding GST and refunds. Pass-through tax and reversed sales should not inflate the revenue used to assess contribution.
Does break-even ROAS forecast performance?
No. It is the revenue-to-ad-spend threshold under the current margin and costs. It does not establish that additional advertising will deliver that revenue.
What to do next
Compare the contribution result with your campaign ledger and then test acquisition cost against customer lifetime value.
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