Ad Profitability & Customer Lifetime Value Calculator

See whether your ad spend actually made money — on the first sale and over the customer's lifetime.

Your Campaign Numbers
$
%

Enquiries the campaign generated.

Leads that actually bought.

$

Revenue from one purchase.

Times they buy over their lifetime (1 = one-time).

Over the customer lifetime
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Enter your numbers above.

First Purchase

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  • Revenue—
  • Profit from sales—
  • ROI—
  • ROAS—

Customer Lifetime

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  • Lifetime revenue—
  • Lifetime profit—
  • ROI—
  • ROAS—
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Cost / Lead
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Cost / Customer
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Close Rate
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LTV / Customer
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LTV : CAC
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Break-even Customers

Are Your Ads Actually Making Money?

Revenue alone doesn't tell you whether a campaign is profitable — you have to account for your profit margin and, just as importantly, what a customer is worth beyond their first order. This free calculator takes your leads, conversions, order value, and margin and shows you the real bottom line.

The big difference is customer lifetime value. A campaign can lose money on the first sale but be very profitable once customers come back and buy again. By comparing first-purchase profit with lifetime profit side by side, you can see whether an ad that looks like a loser is actually a winner — and how much you can afford to spend to acquire a customer.

How to Calculate Your Advertising ROI

  1. Enter your ad spend

    The total amount you spent on the campaign you're measuring.

  2. Enter leads and customers

    How many leads the campaign produced, and how many became paying customers. This gives you your close rate and cost per lead.

  3. Enter your average order value

    How much a customer spends on a single purchase.

  4. Enter purchases per customer

    How many times an average customer buys over their whole relationship with you. Use 1 for a one-time purchase, or a higher number if they come back.

  5. Enter your profit margin

    Your margin as a percentage, so revenue can be converted into actual profit.

  6. Read first-purchase vs lifetime

    Compare the two verdicts. If you're losing money on the first sale but profitable over the lifetime, your ads may be worth keeping — and scaling.

Frequently Asked Questions

How do you calculate advertising ROI?

Find the profit from the sales your ads generated (revenue × your profit margin), subtract the ad spend to get net profit, then divide net profit by ad spend and multiply by 100 for a percentage.

What is customer lifetime value (LTV)?

The total revenue or profit a customer generates over their entire relationship with you — not just their first purchase. Here it's the average order value multiplied by the average number of purchases per customer.

Why does lifetime value matter for ad profitability?

Many campaigns lose money on the first sale but become very profitable once customers return and buy again. Judging ads only on the first purchase can lead you to kill campaigns that are actually profitable over time.

What is a good LTV:CAC ratio?

About 3:1 is a common healthy benchmark — each customer is worth roughly three times what it cost to acquire them. Around 1:1 means you're only breaking even.

What is the difference between ROI and ROAS?

ROAS is revenue ÷ ad spend and ignores your costs. ROI is based on profit after your margin. ROAS shows revenue per ad dollar; ROI shows whether you actually made money.

How is profit margin used in the calculation?

Margin is applied to revenue to find gross profit — a 70% margin on $1,000 is $700. That profit, not the full revenue, is what's compared against your ad spend.

Not sure your ad spend is paying off?

North County Digital helps businesses turn advertising into predictable, profitable growth — from strategy to tracking to scaling what works.

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