Business Glossary
How to Calculate Marketing ROI UK
Marketing ROI measures net profit return on total marketing investment. Unlike ROAS which measures revenue return, marketing ROI measures profit return — the more useful metric for understanding whether marketing adds to the bottom line.
The Formula
Marketing ROI % = ((Revenue × Gross Margin %) − Marketing Cost) ÷ Marketing Cost × 100
Worked Example — UK SME
A UK service business: £6,000/month marketing, £28,000 attributed revenue, 65% gross margin. Gross profit = £18,200. Marketing ROI = (18,200 − 6,000) ÷ 6,000 × 100 = 203%.
UK Benchmark
📊 Marketing ROI above 100% means marketing generates more gross profit than it costs. Below 100% means marketing is a net cost. Most UK SME marketing budgets run at 3–8% of revenue.
Common Questions
How do I attribute revenue to marketing?
Use UTM parameters on all digital campaigns. Set up conversion tracking. For offline, ask every new customer how they found you and record it consistently.
What should I do with underperforming channels?
Pause or cut channels with consistently negative ROI. Give borderline channels a 90-day improvement window with specific conversion targets.
How does marketing ROI relate to ROAS?
ROAS measures revenue return. Marketing ROI measures profit return. For a product with 40% margin, 4x ROAS gives approximately 60% marketing ROI.
Related terms