Marketing ROI is the number every board asks for and almost nobody measures well. McKinsey’s State of Marketing 2026 found that only 3% of European CMOs can explain more than half of their marketing spend through marketing ROI measurement, even as three in four plan to raise budgets next year. Meanwhile Nielsen reports that 85% of marketers say they are confident measuring ROI, but only 32% measure it holistically across traditional and digital channels. Confidence is high. Evidence is thin.
This report answers the questions CMOs actually search for: what marketing ROI is, how to calculate it, what a good marketing ROI looks like, what the benchmarks by channel say, and why chasing the ratio can quietly shrink profit. We close with a seven step plan to improve the return on your budget. Every number is sourced, vendor research is flagged, and where the evidence is weak we say so.
The short version
- There is no universal good marketing ROI. The often quoted 5:1 rule has no published study behind it. A good return depends on your margin, your category and, above all, the time window you measure.
- Time horizon changes the answer. UK econometrics show the average £1 of advertising returns £1.87 in profit within 13 weeks and £4.11 once longer effects are counted, with 58% of profit arriving after the first quarter (Profit Ability 2).
- Maximising the ratio is not the same as maximising profit. IPA analysis found budget explains 89% of the variation in profit payback and ROI just 11%. Spending less usually raises ROI while lowering total profit.
- Most measurement still flatters the bottom of the funnel. Last click can overstate paid search by up to 190% and understate TV by about 90%, according to the WARC Multiplier Effect report.
- The fix is a measurement stack, not a single metric. Combine marketing mix modelling, incrementality tests and brand tracking, judge channels on profit over a full year, and fund creative quality as seriously as media.
What is marketing ROI, and how do you calculate it?
Marketing ROI (return on investment, sometimes written MROI or ROMI) measures how much a business earns back from what it spends on marketing. The standard formula is simple: take the profit generated by the marketing, subtract the cost of the marketing, then divide by the cost of the marketing. Multiply by 100 for a percentage.
The hard part is the first term. “Profit generated by the marketing” should mean incremental profit: the sales that would not have happened without the activity, multiplied by your gross margin. Counting every sale a campaign touched, or using revenue instead of profit, is the most common reason marketing ROI figures look far healthier in a deck than in the accounts.
A worked example (illustrative)
Say a brand spends £100,000 on a campaign and a properly controlled test shows £400,000 of incremental revenue. At a 40% gross margin that is £160,000 of incremental gross profit. Profit ROI is £160,000 minus £100,000, divided by £100,000, which is 60%. The same campaign has a revenue return, or ROAS, of 4:1. Both numbers are true. Only one tells the finance director whether the business got richer.
| Metric | Formula | Example result | Best used for |
|---|---|---|---|
| Revenue ROAS | Incremental revenue divided by spend | 4.0 (4:1) | Comparing campaigns inside one channel |
| Profit ROI | Incremental gross profit minus spend, divided by spend | 60% | Board reporting and budget setting |
| Profit per £1 | Incremental gross profit divided by spend | £1.60 | Comparing channels with econometrics |
| Total profit | Incremental gross profit minus spend | £60,000 | Deciding how much to spend in total |
Illustrative example built by Advertain. Figures are invented to show the arithmetic, not a benchmark.
If you only need the social media version, our guide on how to calculate social media ROI walks through the formula, tracking setup and a template.
What is a good marketing ROI?
Search for what a good marketing ROI is and you will find the same answer repeated everywhere: 5:1, or five pounds of revenue for every pound spent. We looked for the original study behind that figure and could not find one. It appears in vendor blogs and agency pitch decks, usually without a source. Treat it as folklore, not a benchmark.
The most rigorous UK answer comes from econometrics rather than surveys. Profit Ability 2, built on £1.8bn of UK media spend across 141 brands and 14 categories, found that the average £1 of advertising generates £1.87 of profit within 13 weeks and £4.11 once sustained effects are included. That is profit, not revenue, so a “good” revenue ROAS at your margin would be considerably higher. We cover the channel by channel version of that study in our TV advertising report and our paid vs organic social report, so we will not repeat it here.
In practice, a good marketing ROI is one that meets three tests:
- It is above break even on profit over the time window your business can afford to wait, which for most brands should be at least a year.
- It is incremental, proven by a test or a model rather than by attribution that credits every sale a campaign touched.
- It sits near the point of maximum total profit, not the point of maximum ratio. We explain why those are different points below.
| The question you are asking | The number to use | Typical window |
|---|---|---|
| Is this ad set working this week? | Platform ROAS or cost per acquisition, treated as directional | Days |
| Which channel should get the next £100,000? | Marginal profit ROI from a marketing mix model | 13 weeks to 1 year |
| Did this campaign create new sales? | Incremental lift from a geo or holdout test | Campaign plus 4 to 8 weeks |
| Is the brand getting stronger? | Brand lift, mental availability, share of search | Quarterly to yearly |
| How much should we spend in total? | Total profit curve and saturation point | 1 to 3 years |
Advertain guidance.
Marketing ROI benchmarks by channel
Here is the uncomfortable truth about marketing ROI benchmarks by channel: the best data sets are proprietary, and most published comparisons are rankings rather than numbers. Nielsen’s Global Compass, for example, ranks social media highest for ROI among the channels it compares, with radio close behind and podcasts comparable to TV and display, but it does not publish the ratios. Every source below uses a different method, so compare directions, not decimals.
| Channel | What the evidence says | Source and caveat |
|---|---|---|
| All media (UK average) | £1.87 profit per £1 in 13 weeks, £4.11 including long term effects | Profit Ability 2, 2024. Econometrics, TV industry body. |
| Broadcast radio | £2.30 short term, £5.00 long term per £1 | Radiocentre and WPP Media, 2025. Built on Profit Ability 2 data; radio body. |
| Digital audio | £2.70 short term, £5.20 long term per £1 | Radiocentre and WPP Media, 2025. Same caveat. |
| Connected TV | 30% stronger ROI than other advertising spend | Analytic Partners ROI Genome. Vendor, undated. |
| Social media | Delivered 1.7x the ROI of TV yet received under a third of TV budgets | Nielsen, 2022. Vendor norms, older data. |
| Retail media (Amazon display) | 48% of incremental sales were a halo onto non Amazon sales | Analytic Partners. Vendor; method not stated. |
| Marketers estimated £38.33 back per £1 | DMA Marketer Email Tracker, 2021. Self reported, not measured. |
Compiled by Advertain from the sources listed. Figures are not comparable across rows because methods, markets and dates differ.
Two patterns survive the caveats. First, channels that build reach and memory, such as TV, audio, CTV and online video, tend to look far better once long term effects are counted. Second, measuring any single channel in isolation understates it: Analytic Partners says brands that measure one channel alone risk underreporting ROI by roughly half, and that omnichannel brands increase ROI by 32% (vendor data).
Why the time horizon changes your marketing ROI
The single biggest reason marketing ROI figures disagree is the window they measure. The CMO Survey 2026 asked US marketing leaders how long the effects of marketing last. The median answer was six months, and 32.1% said two years or more. Yet 70.6% admitted they cope with pressure to prove value by focusing on short term impact over long run gains.
The econometric evidence backs the long view. In Profit Ability 2, 58% of advertising’s total profit arrives after the first 13 weeks. The newer Growth Gap study from WPP Media for Thinkbox found that performance channels earn over half of their total return in the first week, which is exactly why they dominate any dashboard that stops counting after a fortnight.
How last click attribution distorts channel ROI
The same report found that long term multipliers, total return divided by short term return, are generally 1.1x to 2x for revenue ROI across media, and that moving from a performance only strategy to a mix of brand and performance lifted revenue ROI by a median of 90%. Moving the other way, from mixed to performance only, cut median revenue ROI by 40%.
The ROI trap: why chasing the ratio can shrink profit
Here is the counterintuitive finding every CMO should know. In research presented at the IPA Effectiveness Conference in October 2025, Les Binet and Will Davis of Medialab analysed IPA award winners and found that budget explains 89% of the variation in profit payback, while ROI explains just 11% (Marketing Week). Budget was eight times more likely to drive effectiveness. Yet when 500 senior marketers were asked, 65% said ROI mattered most.
What explains profit payback in IPA award winners
The reason is diminishing returns. The first pounds you spend reach the most responsive buyers, so ROI is highest when budgets are small. Every extra pound earns a little less. A brand that cuts spend will almost always see its ROI rise, while its total profit falls. Optimise for the ratio and you optimise your way into decline.
“Maximising ROI is not the way you grow.” Les Binet, speaking at Google Marketing Live, June 2026
The data on underinvestment points the same way. Nielsen’s normative analysis found half of media plans were underinvested by a median of 50%, and that ROI could improve by 50% with the ideal budget (Nielsen, 2022). In the UK, the Growth Gap research estimates brands leave 11% of potential profit growth, about £32bn, on the table, with the average brand investing around £15m a year against a profit saturation point near £30m.
Why is marketing ROI difficult to measure?
Marketing ROI is difficult to measure because the effects are delayed, spread across channels, and mixed up with everything else that moves sales: price, distribution, competitors, weather and the economy. Attribution tools that follow clicks see only the last visible step. The result is a measurement gap that confidence surveys hide.
Confidence in measuring ROI is rising. Holistic measurement is not.
Other studies tell the same story. NIQ’s CMO Outlook found 84% of CMOs prioritise ROI as their main budget metric, a third use five to fifteen tools to measure it, and 54% say connecting data sources is a major barrier (vendor, 250+ marketers). Only 22% of senior marketers strongly feel they have the data to justify marketing’s value to the CFO, according to Perion and Advertiser Perceptions (vendor, 167 North American marketers). In Europe, Nielsen found just 23% measure holistically, against 32% globally (IAB Europe).
Creative is the ROI multiplier nobody budgets for
Media plans get modelled to the decimal point. Creative usually does not, even though it may be the larger lever. Research by Winterberry Group suggests creative drives 40% to 70% of campaign performance, and 99% of marketers say measuring the lifetime value of creative is important, but only 54% say they do it very effectively (sponsored by measurement vendors).
System1’s Extraordinary Cost of Dull put a price on weak creative. Using emotional response testing, it estimated that extremely dull ads absorb £0.95bn, or 18%, of UK TV spend. At the same excess share of voice, a brand with engaging ads gained 1.26 share points a year, against 0.13 for one running extremely dull ads, nearly ten times less growth for the same money.
Share of UK viewers feeling nothing, by how dull the ad is
The long run trend is not encouraging. Peter Field’s analysis for the IPA found the effectiveness of creatively awarded campaigns fell from about 1.9 very large business effects per campaign in 2008 to just over 1.4 in 2018, as short term campaigns rose from about 10% to 25% of award winners (Marketing Week). On the brand side, Kantar’s Blueprint for Brand Growth reports that brands strong in meaningful difference can achieve up to five times the penetration and command up to twice the category’s average price.
This is the part of marketing ROI we work on every day. Content people choose to watch earns attention that paid placement has to rent. Our Formula E work reached 7M+ views across YouTube, Instagram and TikTok, and we helped Paul Ribot grow from 0 to 30,000 subscribers in 75 days. You can see more on our work page.
How much budget does a good marketing ROI need?
If budget drives profit more than ratio does, the next question is how much to spend. There is no single answer, and the surveys vary widely. BCG says marketing spend typically runs at 5% to 15% of revenue. US marketing leaders in The CMO Survey reported 9.0% of company revenue in 2026, after a volatile few years.
Marketing budget as a share of company revenue, US
Where that money goes matters as much as how much there is. Gartner found awareness and conversion now take 62.6% of media spend, while spending on loyalty and retention has fallen 29% since 2024 to under 15%. The WARC Multiplier Effect report flags more than 25% of budget in search as a red flag and recommends at least 30% for brand, with 40% to 60% as best practice. In Europe, McKinsey found 72% of CMOs plan to raise budgets relative to revenue in 2026.
The prize for getting measurement right is real. Analytic Partners found that the 22% of large advertisers it classes as best at commercial decision making earned an extra $40 of ROI per $100 of media (vendor, 455 senior decision makers). McKinsey estimates better marketing ROI management can free up 15% to 20% of marketing spend.
How to measure marketing ROI properly
No single tool answers every question, which is why the strongest teams build a measurement stack. Adoption is moving fast: EMARKETER and TransUnion found 46.9% of US marketers plan to invest more in marketing mix modelling, and 52% already use incrementality testing (vendor). Google made its open source model Meridian available to all marketers in January 2025, joining Meta’s open source Robyn, which has cut the cost of entry sharply.
| Method | What it tells you | Strength | Weakness |
|---|---|---|---|
| Marketing mix modelling | Profit return by channel, saturation curves, long term effects | Covers offline and online; privacy safe | Needs two or more years of data; slow to update |
| Incrementality and geo tests | Whether a campaign caused extra sales | Closest thing to proof | One question at a time; needs scale |
| Brand lift studies | Change in awareness, consideration and recall | Fast read on brand effect | Does not measure sales directly |
| Share of search and brand tracking | Mental availability over time | Cheap, early signal of future share | Correlation, not cause |
| Platform attribution | Which ads and audiences convert in channel | Real time optimisation | Overstates its own channel; ignores long term |
Advertain guidance.
For the detail on two of these methods, see our guides to running a YouTube brand lift study and calculating share of search. Our brand awareness report covers the wider brand tracking options.
Seven steps to improve marketing ROI in 2026
This is the plan we would put in front of a CMO who wants a marketing ROI number the finance team believes, and a budget that grows profit rather than just the ratio.
- Agree one definition with finance. Use incremental gross profit, name the time window, and report revenue ROAS only as a secondary number.
- Measure over at least a year. Report a 13 week figure and a full year figure side by side so long term channels are not punished for being patient.
- Build or buy a marketing mix model. Open source options such as Meridian and Robyn make this realistic for mid sized brands with two years of weekly data.
- Calibrate with experiments. Run at least one geo or holdout test a quarter on your largest channels and feed the results back into the model.
- Find the profit maximising budget, not the ROI maximising one. Use saturation curves to see where the next pound still returns more than a pound in profit.
- Protect brand investment. Keep a meaningful share of budget on reach building activity, and treat a performance share creeping above three quarters as a warning sign.
- Put creative into the model. Test ads before launch, track attention and emotional response, and give strong content longer to run instead of refreshing for the sake of it.
If you want a second opinion on where your budget is leaking, or a content programme built to earn attention rather than rent it, talk to us.
Frequently asked questions
What is a good marketing ROI percentage?
There is no universal figure. On a profit basis, any return above 0% over your chosen window means the marketing paid for itself. UK econometrics put the average at £1.87 of profit per £1 within 13 weeks and £4.11 including long term effects. Judge your own figure against your margin, category and time window rather than a rule of thumb.
Is 5:1 a good marketing ROI?
A 5:1 revenue return is often quoted as good, but we could not find a published study behind it. Whether 5:1 is good depends on your gross margin: at a 20% margin, 5:1 revenue only just breaks even on profit, while at 60% it is very healthy.
What is the difference between marketing ROI and ROAS?
ROAS (return on ad spend) divides revenue by ad spend. Marketing ROI usually means profit after the cost of the marketing, divided by that cost, and can include production and agency costs as well as media. ROAS is useful inside a channel; profit ROI is the number for budget decisions.
How long does marketing take to show ROI?
Performance channels can show most of their return within a week, but UK econometrics show 58% of advertising profit arrives after the first 13 weeks. US marketing leaders put the median life of marketing effects at six months, with a third saying two years or more.
Which marketing channel has the highest ROI?
It depends on the method and the window. Nielsen ranks social media highest among the channels in its Global Compass, with radio close behind, while long term UK econometrics favour reach channels such as TV and audio. Channels also work better together, so the highest ROI usually comes from the mix, not one channel.
