Enter the increase in sales ($) and the marketing cost ($) into the Return on Marketing Calculator. The calculator will evaluate and display the Return on Marketing. 

Return on Marketing Formula

The following formula is used to calculate the Return on Marketing. 

ROM = (IS - MC) / MC * 100
  • Where ROM is the Return on Marketing (%)
  • IS is the increase in sales ($) 
  • MC is the marketing cost ($) 

To calculate the return on marketing, divide the difference between the increase in sales and the marketing cost by the marketing cost, then multiply by 100.

How to Calculate Return on Marketing?

The following example problems outline how to calculate Return on Marketing.

Example Problem #1:

  1. First, determine the increase in sales ($).
    • The increase in sales ($) is given as: 3,000.
  2. Next, determine the marketing cost ($).
    • The marketing cost ($) is provided as: 1,450.
  3. Finally, calculate the Return on Marketing using the equation above: 

ROM = (IS – MC) / MC * 100

The values given above are inserted into the equation below and the solution is calculated:

ROM = (3,000 – 1,450) / 1450 * 100 = 106.89 (%)

FAQ

What factors can affect the Return on Marketing (ROM)?
Several factors can influence the Return on Marketing, including the effectiveness of the marketing campaign, the target audience’s response, market conditions, competition, and the overall marketing strategy. Changes in any of these factors can lead to variations in the ROM.

How can businesses improve their Return on Marketing?
Businesses can improve their Return on Marketing by optimizing their marketing strategies, targeting the right audience, using data analytics to make informed decisions, improving the quality of their advertisements, and continuously monitoring and adjusting their marketing efforts based on performance metrics.

Is Return on Marketing the same as Return on Investment (ROI)?
While Return on Marketing (ROM) and Return on Investment (ROI) are related concepts, they are not the same. ROM specifically measures the efficiency and effectiveness of marketing campaigns in generating revenue, whereas ROI measures the overall profitability of an investment, which can include but is not limited to marketing expenditures.