Digital Advertising Campaign Markup Calculator
The Digital Advertising Campaign Markup Calculator is used to help calculate what your CPM or Total Budget should be, inclusive of your profit (markup). You can also calculate what your markup percentage is based on the other values.
Fill in any two fields to start calculating the remaining fields:
How to calculate markup
- Determine your COGS (cost of goods sold). For example
$40. - Subtracting the cost from the revenue to get your gross profit
- Example: Our product sells for
$50. S$10. - Divide gross profit by COGS. $10 / $40 = 0.25
- Express it as a percentage: 0.25 * 100 = 25%
The markup formula is as follows: markup = 100 * profit / cost.
If you do not know the profit, and only know cost and revenue, substitute profit for the formula for profit. Profit = revenue – cost.
If you want to calculate the selling price, the formula is revenue = cost + cost * markup / 100.
This is helpful in the the common scenario of – you know how much you paid for something and your desired markup, and now want to figure out the sale price.
What is the definition of markup and what is the difference between markup and margin?
The difference between the cost of a product or service and its sale price is called the markup (or markon).
As a general rule of a successful business, markup must be set in such a way as to be able to cover your expenses and produce a reasonable profit.
For example, when you buy something for $80 and sell it for $100, your profit is $20. The ratio of profit ($20) to cost ($80) is 25%, so the markup is 25%.
Markup describes the ratio of the profit to the cost paid.
Markup can be confused with profit margin, which is a similar metric. The profit margin allows you to compare your profit to the sale price, not the purchase price.
For example, when you buy something for $80 and sell it for $100, your profit is $20. To calculate profit margin, we would compare $20 to $100, so the profit margin is 20%
Profit margin is a ratio of the profit to revenue.