Media buying Roi calculation

Sahil Singh

5 days ago

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:

ROI (%) = [(Revenue from Ads - Total Media Cost) / Total Media Cost] × 100

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 = [(8,00,000 - 2,00,000) / 2,00,000] × 100
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:

True ROI (%) = [(Revenue - Total Cost) / Total Cost] × 100

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 = [(10,00,000 - 5,00,000) / 5,00,000] × 100
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:

ROAS = Revenue / Ad Spend

ROI (Return on Investment)

Looks at profit vs total cost (ad spend + other costs):

ROI = (Revenue - Total Cost) / Total Cost

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:
ROAS = 6,00,000 / 1,50,000
ROAS = 4.0 (or 4:1)

True ROI:
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
Add them up as Total Media Cost.
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
Be consistent. When you recognize revenue generously, your ROI will be inflated; when too strict, it may be lower but safer.
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

Revenue = 30 × 50,000 = ₹15,00,000
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 Analysis:
Immediate revenue = ₹3,60,000
LTV revenue = 400 × 5,000 = ₹20,00,000
Total cost = 2,00,000 + 50,000 = ₹2,50,000

Immediate ROI:
ROI = [(3,60,000 - 2,50,000) / 2,50,000] × 100
ROI = 44%

LTV-based ROI:
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 buying and 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

Q1. How do I calculate media buying ROI for my business?

Media buying ROI is determined by taking the revenue you got from your advertisements minus total media costs, then dividing the result by total media cost and multiplying by 100. Simply: ROI = (profit from ads / ad costs) × 100.

Q2. What is a good ROI for media buying?

Depending on your industry and margins, most businesses seek at least 100% ROI—earning twice the amount they spent. Campaigns that perform well can achieve 200%-300% ROI or higher, particularly when lifetime value is being tracked.

Q3. How can I improve my media buying ROI quickly?

Cut spending on poor-performing campaigns, optimize landing pages, test new creatives, and redirect budget to high-ROAS keywords, audiences, and platforms. Fixing tracking and attribution can also help identify what truly works.

Q4. What does Riyo Advertising do to increase my ROI?

Riyo Advertising increases your ROI by strategizing your media, purchasing smarter across Google, Meta, and other channels, optimizing campaigns daily, and fixing leaks in your conversion funnel. It's all about reducing cost per lead or sale and maximizing revenue.

Q5. Is Riyo Advertising a performance-focused media buying agency?

Yes. Riyo Advertising is a performance-based media buying agency. They monitor metrics like ROAS, cost per lead, cost per sale, and overall media buying ROI to determine where to increase or decrease spending.

Q6. Can Riyo Advertising help ecommerce brands with ROI?

Yes. For ecommerce brands, Riyo Advertising runs campaigns like Google Shopping, Performance Max, and Meta ads, configures remarketing funnels, and optimizes product-level performance to enhance return on ad spend and overall media buying ROI.

Q7. How do I know if my current agency is wasting ad spend?

If they report only clicks and impressions but no clear numbers on leads, sales, ROAS, or media buying ROI, that's a warning sign. High spend with no revenue results is another indicator. A performance-oriented agency like Riyo can conduct an audit to expose budget wastage.

Q8. Does Riyo Advertising offer a free ROI or media audit?

Yes. Riyo Advertising offers a free media buying audit where they examine your current campaigns, tracking setup, and funnel to demonstrate where you're losing money and what can be done to increase ROI.