Most businesses can't answer "what did we make from Facebook last quarter?" because the trace is missing, not because the ads failed.
What is the formula?
ROI = (gross profit from ad-sourced customers − ad spend − agency fee) ÷ (ad spend + agency fee).
A worked example with illustrative figures:
- Ad spend $5,000, agency fee $5,000, total cost $10,000.
- 6 customers came from the ads, each worth $4,000 first-year gross profit: $24,000.
- ROI = ($24,000 − $10,000) ÷ $10,000 = 1.4, or 140%.
- Cost per customer = $10,000 ÷ 6 = about $1,667.
Now the same account with cost per lead reported alone: it might say $40 a lead and look fine at any of those outcomes. The cost per customer is what settles it. See cost per lead vs cost per customer.
What tracking do you need?
Four things:
- Source on every lead. Keep the ad, campaign and form on the lead record, not in a marketing-source field people forget to fill in.
- Lead-to-person matching. Match Meta leads to CRM records by person: email first, then phone, then name.
- Outcome stages in the CRM: contacted, qualified, booked, showed, won, and the value of the win.
- Offline sales included. Phone and in-person closes must be entered, or the ROI will read low.
In our documented Compare Funerals account, only 7.02% of CRM leads had ever been marked qualified and the CRM's own marketing-source field was frequently blank. Matching leads by person is what made the results traceable. See the case study.
Which metrics should you not manage to?
- Cost per lead on its own. It stops at the form.
- Clicks, reach, impressions and CTR. Diagnostics for creative, not results.
- ROAS from the platform for anything sold offline, because the platform can't see it.
Nielsen's 2025 research found 85% of marketers say they are confident they can measure ROI, but only 32% measure it holistically across channels. Don't assume your dashboard is in the 32%.
The first ROI lesson I learned was with a fish and chip shop: the website wasn't the outcome, footfall was. Clicks, views and even leads are the same. Revenue is downstream of all of them.
How do you judge results when the sales cycle is long?
Report in stages: lead, qualified opportunity, confirmed sale. A month proves acquisition efficiency; sales may take weeks or months for a considered purchase. Label what's proven and what's still developing rather than forcing a revenue number early.
What does this look like on a real account?
Compare Funerals started with only 7.02% of CRM leads ever marked qualified and a marketing-source field that was often blank. Matching leads to the CRM by person (email, then phone, then name) is what made each qualified opportunity traceable to the ad behind it, and reporting in four stages (Meta lead, CRM lead, qualified opportunity, confirmed sale) is what we set up for you.
Use the revenue leak formula to see where your own chain leaks, or Book A Free Call if you spend $5,000 or more a month on ads and can't yet trace it to customers.
Sources
- Nielsen, Nielsen unveils blueprint to achieve confident ROI, October 2025.
