Marketing spend that generates revenue but not profit is not a success. This tool calculates ROAS and profit ROAS by channel, identifies which channels deserve more budget, and shows exactly what each pound of marketing spend is actually returning.
Real inputs. Real outputs. See exactly what you get before you commit to anything.
This is a live preview of the Marketing Analysis Tool — the same tool available to all subscribers.
Subscribe to access →Every tool generates a downloadable PDF report — structured like a professional consultant's analysis, built from your actual data. Below is an example using dummy data.
Return on Ad Spend (ROAS) is the most commonly used metric for measuring marketing performance, and it is a reasonable starting point. A 4x ROAS means that for every pound spent on advertising, four pounds of revenue was generated. But revenue is not profit. And for most SME owners making budget decisions, profit is the only metric that matters.
The difference between revenue ROAS and profit ROAS is your gross margin. A 4x revenue ROAS at a 40% gross margin generates £1.60 of gross profit per £1 spent — a 60% gross profit return on marketing investment. A 4x ROAS at a 25% gross margin generates only £1.00 — you are recovering your spend but generating no surplus. Below this threshold, marketing spend is consuming gross profit rather than generating it.
Most marketing dashboards, agencies, and reporting tools report revenue ROAS. The Marketing Analysis Tool reports profit ROAS — the figure that tells you whether your marketing is actually working commercially.
The most valuable immediate action available to most businesses with a marketing budget is not to increase total spend — it is to reallocate existing spend from underperforming channels to the highest-performing ones. In most multi-channel marketing setups, the range between the best and worst performing channels is 3-8x. The best channel generates 6x ROAS. The worst generates 1.5x. Both are active, both receive budget, but the commercial return per pound spent is radically different.
The tool calculates ROAS per channel, ranks channels by efficiency, and models the revenue and profit impact of reallocation. A simple shift of 30% of budget from the lowest-ROAS channel to the highest typically improves blended ROAS by 20-40% without any increase in total spend.
The ratio of marketing spend to revenue is a benchmark that provides useful context for whether a business is investing appropriately in growth. For most UK SME product and service businesses, a marketing spend of 3-8% of revenue represents an active investment in acquisition. Below 2% typically means the business is relying on referrals, repeat business, or organic search rather than active outreach. Above 10% is viable in high-margin subscription or software businesses but unsustainable at lower margins.
The Marketing Analysis Tool calculates your marketing spend as a percentage of your revenue target and benchmarks it against these thresholds. This provides a second check on whether your total budget is appropriate — independent of how well individual channels are performing.
Break-even ROAS is the minimum ROAS required for marketing spend to cover its own cost in gross profit terms. It is calculated as 1 divided by gross margin. At a 40% gross margin, break-even ROAS is 2.5x — any channel below this is loss-making at the gross profit level. At a 30% gross margin, break-even ROAS is 3.3x. At a 20% margin, it is 5x.
This matters because channels that appear to be performing adequately on a revenue ROAS basis may be below break-even on a profit ROAS basis. The tool calculates break-even ROAS for your specific margin and highlights any channels that are operating below it — these are channels that should be paused, restructured, or cut before any budget increase is considered.
The Marketing Analysis Tool is included in every LumixAI subscription. £19.99/month. 7-day free trial. Cancel any time.