Free Digital Marketing Tools

Margin Calculator

Margin is the difference in price from the initial cost - often paid for by the business - to what a customer actually pays for the service. The difference between margin and markup is margin based on gross revenue. Margin is the percentage of the gross revenue the business keeps, where markup is how much over cost of goods a business is selling a product for. The greater the margin, the greater the profit for the business.

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To calculate gross revenue, and net profit based on your margin, enter the cost to the business (cost of services) and what percentage of revenue you would like to earn based on your services.

Digital Marketing Terms, Acronyms, Calculations and Formulas

Spend: Spend is the net advertising cost. This does not include management fees, creative or anything else - purely the advertising hard cost.

Impressions: Impressions are the amount of times ads appeared, or were shown, in the given channel. Essentially how many ads were served by the advertising spend.

Cost-per-thousand Impressions (CPM): CPM is how much it costs in net advertising spend to purchase 1,000 impressions. ((Spend / Impressions)*1000) = CPM

Click-through Rate (CTR): CTR is the rate at which impressions result in a viewer of the ad clicking on it. If 100 ads are shown and 1 person clicks, that is a 1% CTR. Clicks / Impressions = CTR

Clicks: Clicks are the amount of people who clicked on, or took an action on an ad. The click metric is also commonly associated with the number of website visitors.

Cost-per-click (CPC): CPC is the average amount paid in advertising spend per click on the ad. Spend / Clicks = CPC

Conversions: Conversions - which could be sales, leads, downloads, email opt-ins - is the total volume of conversion actions attributed to the ad spend.

Conversion Rate: Conversion rate is the rate at which a click turns into a conversion action such as a lead form submission, ebook download, email opt-in, sale, etc. Conversions / Clicks = Conversion Rate

Cost-per-conversion: Cost-per-conversion - often referred to as cost-per-acquisition (CPA) - is the average amount of advertising spend invested per resulting conversion action. Spend / Conversions = Cost-Per-Conversion

Return on Ad Spend (ROAS): ROAS is a measurement of how much revenue is returned per dollar spent. This can be expressed as a percentage, or a dollar amount. Revenue / Spend = ROAS

Markup: Markup is the difference in price between what a business pays for a product (cost) and what a buyer pays for that same product. Markup is based on the cost of goods paid by the business. Markup is the net revenue amount the business will keep.

Margin: Margin is the difference in price between what a business pays for a product (cost) and what a buyer pays for that same product. Margin is the gross revenue percentage the business keeps.