Google Ads ROI Calculator

Formula and inputs

Monthly net profit is attributed revenue minus total monthly cost, including ad spend, management, and tools. ROI divides cumulative net profit over the period by the initial setup investment. Payback period divides setup cost by monthly net profit, and the optional tax and discount rates adjust profit and NPV.

Example scenario

Lead-gen account with an agency fee

A home services company pays $3,500 for account setup, landing pages, and call tracking. The account attributes $14,000 in monthly revenue. Monthly costs are $8,500: $7,000 in ad spend and $1,500 in agency management. They model twelve months.

• -Initial investment: $3,500
• -Monthly revenue: $14,000
• -Monthly costs: $8,500
• -Time period: 12 months

Net profit is $5,500 a month, so setup pays back in under one month and the year looks strong. The number to challenge is the $14,000: if it includes jobs that would have arrived organically, recompute with only incremental revenue before scaling the budget.

Common mistakes

• -Using platform-reported conversion value as revenue without removing cancelled jobs, returns, or duplicate leads.
• -Comparing revenue to ad spend alone and ignoring management fees, landing pages, and call tracking.
• -Treating a seasonal peak month as the steady monthly baseline.

How to interpret the output

• -If ROI is positive but thin, test the sensitivity: a 15 percent drop in attributed revenue should not flip the account to a loss you cannot absorb.
• -Fast payback with low monthly profit means the account is efficient but small; scaling spend is the lever to test next.
• -If the model only works at a 100 percent attribution assumption, the honest answer is that you do not yet know whether the account is profitable.

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