How to Calculate Media Buying ROI: Formula & Examples
2026 Guide
When you are purchasing media on Google, Meta, CTV, or even newspapers and TV, the question that is always there is: Are my ads even making money? That is where media buying ROI is involved. It explains the profit margin you get for each rupee you spend on advertisements.
The following is a plain, practical explanation on how to calculate media buying ROI, the basic ROI equation, how it varies when compared to ROAS, and step-by-step instructions on how to calculate it on your own spreadsheet or ROI calculator.
1. Basic Media Buying ROI Formula
The classic media buying ROI formula is:
Where:
- Revenue from Ads = Sales that can be attributed to your campaigns
- Total Media Cost = All ad spend (and ideally related fees) for that campaign
This simple formula is sufficient in case you are in a rush.
Example 1: Simple Media Buying ROI
Given:
- Media spend: ₹2,00,000
- Revenue from media: ₹8,00,000
ROI = [6,00,000 / 2,00,000] × 100
ROI = 300%
Meaning: For every ₹1 spent on media, you earned ₹3 in profit (after media cost, before product/other costs).
2. "True" Media Buying ROI (Including All Costs)
To have a more truthful image of your ROI, add all money spent on advertising:
- Agency / freelancer fees
- Creative production costs (design, video, copy)
- Tools (tracking, analytics, landing page software)
Then use:
Example 2: Including All Media Buying Costs
Given:
- Revenue from ads: ₹10,00,000
- Media spend: ₹3,50,000
- Agency fee: ₹75,000
- Creative and tools: ₹75,000
- Total cost = 3,50,000 + 75,000 + 75,000 = ₹5,00,000
ROI = [5,00,000 / 5,00,000] × 100
ROI = 100%
Meaning: You doubled your total investment—₹1 in total cost returned ₹2 in revenue.
3. ROAS vs ROI in Media Buying
ROAS (Return on Ad Spend) is also followed by many media buyers along with ROI. They are similar, though not identical:
ROAS (Return on Ad Spend)
Looks at revenue vs ad spend only:
ROI (Return on Investment)
Looks at profit vs total cost (ad spend + other costs):
Example 3: ROAS vs ROI
Suppose:
- Revenue from ads: ₹6,00,000
- Ad spend: ₹1,50,000
- Other costs (creatives, tools, team): ₹1,00,000
ROAS = 6,00,000 / 1,50,000
ROAS = 4.0 (or 4:1)
Total Cost = 1,50,000 + 1,00,000 = 2,50,000
ROI = [(6,00,000 - 2,50,000) / 2,50,000] × 100
ROI = 140%
Summary: ROAS provides insights on the intensity of your ad outlay. ROI will inform you whether the business in totality is earning money or not after all expenses.
4. Step-by-Step: How to Measure Media Buying ROI
You may take this as a checklist or ROI calculator input flow:
-
Define the Campaign Window
Select the timeframe you are measuring (e.g., last month, individual sale, quarter). Ensure you have the same time period for your income and expenses. -
Gather Media Costs
For each channel (Google, Meta, programmatic, TV, print), collect:- Ad spend (invoices or platform data)
- Agency / consultant fees linked to those campaigns
- Creative costs specifically for that campaign
- Tools or tracking costs if campaign-specific
-
Attribute Revenue to the Campaign
Find revenue generated using your analytics/CRM:- Ecommerce: Revenue tagged to specific campaigns or sources
- Lead gen: Value of deals closed from leads generated by that campaign
- Offline sales: Use coupon codes, call tracking, or store-visit uplift models
-
Plug into the Formula
Use either basic or "true" ROI including all costs. -
Interpret the Result
See the ROI guidelines section below for benchmarks.
ROI Interpretation Guidelines
Broad guidelines (these vary by industry):
| ROI Range | Assessment |
|---|---|
| < 0% | You're losing money; something is broken (wrong targeting, offer, funnel, or tracking) |
| 0–50% | Weak; might be acceptable for brand campaigns or very early testing |
| 50–150% | Decent; you're profitable but there's room to optimize |
| 150–300%+ | Strong; consider scaling while watching product margins and capacity |
5. Media Buying ROI Examples by Objective
Example 4: Lead Generation Campaign
Industry: B2B SaaS
- Ad spend: ₹3,00,000
- Other costs (webinar setup, creative, tools): ₹1,00,000
- Leads generated: 600
- Customers closed: 30
- Average revenue per new customer (first year): ₹50,000
Total cost = 3,00,000 + 1,00,000 = ₹4,00,000
ROI = [(15,00,000 - 4,00,000) / 4,00,000] × 100
ROI = 275%
Additional Metrics:
- Cost per lead (CPL) = 3,00,000 ÷ 600 = ₹500
- CAC (only media) = 3,00,000 ÷ 30 = ₹10,000
Insight: ROI is strong; this is a good candidate for scaling.
Example 5: Ecommerce Media Buying ROI with LTV
Sometimes your immediate ROI looks average, but lifetime value (LTV) changes the picture.
- Ad spend: ₹2,00,000
- Other costs: ₹50,000
- New customers: 400
- First-order revenue: ₹3,60,000
- One-year LTV per customer: ₹5,000
Immediate revenue = ₹3,60,000
LTV revenue = 400 × 5,000 = ₹20,00,000
Total cost = 2,00,000 + 50,000 = ₹2,50,000
ROI = [(3,60,000 - 2,50,000) / 2,50,000] × 100
ROI = 44%
ROI = [(20,00,000 - 2,50,000) / 2,50,000] × 100
ROI = 700%
Insight: ROI may seem small in a short-term perspective, but with good retention, the campaign proves to be quite lucrative long-term.
6. Simple Media Buying ROI Calculator (Template)
This can be configured in your Excel, Google Sheets, or dashboard.
Spreadsheet Setup
| Cell | Label | Formula |
|---|---|---|
| B2 | Revenue from ads | [Enter value] |
| B3 | Media spend | [Enter value] |
| B4 | Other costs (agency, creative, tools) | [Enter value] |
| B5 | Total cost | =B3 + B4 |
| B6 | Net profit | =B2 - B5 |
| B7 | ROI % | =B6 / B5 * 100 |
| B8 | ROAS | =B2 / B3 |
That gives you a quick, reusable media buying ROI calculator for each campaign or channel.
7. Practical Tips to Improve Media Buying ROI
When you are aware of your numbers, it becomes a game of intelligent optimization:
- Fix tracking first – ROI will be misleading without proper attribution
- Trim wasted spend – Drop geos, placements, and audiences that are not converting
- Test offers and creatives – Even higher ROI jumps are often achieved through a better offer or landing page, not only less expensive clicks
- Shift budgets to winners – Regularly shift spend from low ROI campaigns to high ROI campaigns
- Watch margins – A campaign with high ROAS and slim product margins may produce poor overall ROI
How Riyo Advertising Maximizes Client ROI
Riyo Advertising enhances client ROI by viewing media as an investment, not an expense, emphasizing end-to-end ROI-based media buyingand digital marketing services.
1. Clear, ROI-Focused Strategy
- Begins with a media buying audit to discover wasted money
- Sets targets in advance: leads, sales, ROAS, ROI
- Develops unique media planning for every business type
2. Smart Channel Mix
- Selects the right combination of Google Ads, Meta, SEO, remarketing
- Performance-based media buying for quick wins
- Avoids excessive spend on low-intent channels
3. Aggressive Campaign Optimization
- Monitors campaigns daily
- Continuous A/B testing on creatives, keywords, audiences
- Focuses on lowering CPC, CPL, and CAC
4. Fixes the Funnel, Not Just Ads
- Optimizes high-converting landing pages
- Matches ad message to landing page headlines
- Installs lead nurturing programs
5. Strong Tracking & Reporting
- Correct cross-platform tracking setup
- Reports on actual business metrics: ROI, ROAS, revenue
- Determines what to scale, fix, or stop
6. Scalable, ROI-Driven Packages
- Low-cost packages for SMEs and startups
- Full-funnel media for larger brands
- Always connects recommendations to ROI and profitability
FAQs About Media Buying ROI and Riyo Advertising
