The short answer
PPC ROI = (gross profit from PPC - total PPC cost) ÷ total PPC cost. Total cost includes ad spend, management fees and tools. For example, $9,700 total cost that generates $43,200 in gross profit is an ROI of about 345%: every dollar invested returns $3.45 in profit.
What to include
On the cost side: ad spend, agency or freelancer fees (or the share of an employee's time), and tools such as call tracking, landing page builders and reporting software.
On the return side: the gross profit from the customers your ads brought in. Use your real close rate and average deal value. For businesses with repeat customers, use lifetime value, or at least first-year value.
Example: B2B services company
| Item | Monthly |
|---|---|
| Ad spend | $8,000 |
| Management fee | $1,500 |
| Tools | $200 |
| Total PPC cost | $9,700 |
| Leads (90) × close rate (20%) | 18 customers |
| Revenue (18 × $4,000) | $72,000 |
| Gross profit at 60% margin | $43,200 |
| Net profit after PPC costs | $33,500 |
| ROI | 345% |
Is management worth the fee?
The fee only makes sense if it improves results by more than it costs. A good manager usually pays for themselves by cutting wasted spend and lifting conversion rate. If your fee is $1,500 a month and the account is still wasting 20% of a $10,000 budget, something's wrong. Our PPC management cost guide covers what you should expect.