How to Calculate ROI on Your LinkedIn Ads
Simple math that shows if your campaigns are actually profitable
ROI tells you if your marketing is working. Here's how to calculate it for LinkedIn ads.
Basic ROI formula: (Revenue - Cost) / Cost × 100 = ROI%
If you spend $1,000 on ads and generate $5,000 in revenue, your ROI is 400%. Simple.
But B2B is more complex. Sales cycles are long. Attribution is tricky. Here's a practical approach.
First, track your cost per lead. Divide your ad spend by the number of leads you got. If you spent $2,000 and got 40 leads, your cost per lead is $50.
Second, know your lead-to-customer rate. If 10% of leads become customers, you need 10 leads to get one customer.
Third, calculate customer acquisition cost (CAC). If you need 10 leads at $50 each, your CAC is $500.
Fourth, know your customer lifetime value (LTV). How much profit does an average customer bring over time?
Fifth, compare LTV to CAC. A healthy ratio is 3:1 or higher. If your LTV is $3,000 and your CAC is $500, you're in good shape.
Track these numbers monthly. Watch for trends. Are your costs going up or down? Is your conversion rate improving?
Use UTM parameters to track which ads drive which leads. This helps you identify your best performers.
Set up conversion tracking in LinkedIn Campaign Manager. This shows you which campaigns drive actual results, not just clicks.
Connect your CRM to your ad platform if possible. This closes the loop on attribution.
Stirling helps you create better-performing ads, which directly improves your ROI. Lower cost per lead means better margins and faster growth.
Marketing ROI isn't just a metric. It's your guide to smarter spending. Master this and you'll make better decisions.
