We’ve all been there. You’re looking at a spreadsheet or a shiny dashboard, and the numbers look fantastic. Your Return on Investment (ROI) is sitting at a healthy 5:1, and you’re ready to double your budget. But then you look at your actual bank balance in your Westpac or CommBank account at the end of the month, and something doesn’t add up.
In the Brisbane business scene, we’re seeing a shift. It’s no longer enough to just 'have a gut feeling' that your radio ads or Google PMax campaigns are working. You need precision. However, the way most SMEs calculate ROI is often flawed, leading to expensive mistakes.
Let’s look at the common traps that turn healthy-looking data into a financial headache, and how you can fix them today.
1. The 'Top-Line' Mirage: Forgetting Net Profit
The most common mistake we see in Queensland boardrooms is confusing Return on Ad Spend (ROAS) with true ROI.
If you spend $1,000 on ads and generate $5,000 in sales, your ROAS is 500%. That sounds great! But if your product cost is $3,500 and your shipping and staff time cost another $1,000, you’ve actually only made $500 in profit from that $1,000 spend. Your real ROI is actually negative.
The Fix: Always calculate ROI based on net profit, not gross revenue. Subtract your Cost of Goods Sold (COGS), merchant fees, and overheads before you celebrate that 'winning' campaign.
2. Ignoring the 'Human' Cost of Implementation
When calculating the 'Investment' part of ROI, many Brisbane business owners only look at the invoice from the media outlet or the ad platform. They forget the three hours their marketing manager spent writing the copy, or the $500 they paid a local photographer for the assets.
If you aren't accounting for the internal time and creative production costs, your ROI is artificially inflated. This often leads to businesses continuing with 'cheap' channels that actually drain significant internal resources. To get a clearer picture, you might need to perform data audits for instant ROI to see where your actual resources are being leaked.
3. The Attribution Tunnel Vision
Are you giving 100% of the credit to the last thing a customer clicked? This is called 'Last-Click Attribution,' and in 2026, it’s a dangerous way to measure success.
Imagine a customer sees your brand on a billboard near the Story Bridge, then sees a Facebook ad, then finally clicks a Google Search ad to buy. If you only look at Google, you’ll think your Facebook and outdoor ads did nothing. You might kill those 'underperforming' channels, only to find your Google sales dry up because nobody is being introduced to your brand anymore. Understanding how multi-touch measurement drives growth is essential for a realistic ROI calculation.
4. Failing to Account for Customer Lifetime Value (LTV)
Not all ROI happens in the first 30 days. This is particularly true for service-based businesses in Brisbane, like law firms, plumbers, or dental clinics.
If it costs you $100 to acquire a customer who only spends $80 on their first visit, a basic ROI calculation says you lost money. But if that customer returns twice a year for the next five years, that $100 investment is actually worth thousands.
Actionable Step: Calculate your average LTV over 12 or 24 months. Use this figure to determine what you can actually afford to pay for a lead. If you find your data is messy, it might be time for sculpting GA4 to track these long-term conversions more accurately.
5. The 'Marketing in a Vacuum' Error
Sometimes, a spike in ROI has nothing to do with your marketing and everything to do with external factors. Maybe it was a rainy week in Brisbane that drove everyone indoors and onto their phones, or perhaps a competitor closed down.
Conversely, if your ROI drops during a cost-of-living squeeze, it might not mean your ads are bad; it might mean the market is tighter. If you don't account for seasonality and market trends, you’ll end up optimising for the wrong things.
How to Calculate ROI the Right Way
To move away from these mistakes, use this refined formula:
1. Identify Total Revenue generated by the campaign. 2. Subtract COGS (the cost to actually fulfill those sales). 3. Subtract Total Marketing Spend (Ad spend + Creative costs + Agency fees). 4. Divide by Total Marketing Spend.
Example: Revenue: $10,000 COGS: $4,000 Marketing Spend: $2,000 Calculation: ($10,000 - $4,000 - $2,000) / $2,000 = 2.0 (or 200% ROI)
Conclusion
Calculating ROI isn't just about proving that marketing works; it's about finding out what doesn't work so you can stop wasting money. By moving beyond simple ROAS and looking at net profit, human hours, and long-term customer value, you’ll make much smarter decisions for your Brisbane business.
Ready to stop guessing and start growing? At Local Marketing Group, we help Australian businesses turn confusing data into clear profit. Contact us today for a strategy session that focuses on your bottom line, not just vanity metrics.