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Methodology

Campaign Profitability Planner methodology

Evaluate total campaign profit after user-entered incrementality and contribution.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Incremental Customers
incrementalCustomers = attributed customers × incrementality

Where

attributedCustomers
Attributed customers (whole or operational units)Source: Business record
incrementalCustomers
Incremental Customers (units)Source: Calculated output
Incremental Contribution
incrementalContribution = incremental customers × contribution

Where

incrementalCustomers
Incremental Customers (units)Source: Calculated output
incrementalContribution
Incremental Contribution (money)Source: Calculated output
Total Campaign Cost
totalCampaignCost = media spend + fixed campaign cost

Where

mediaSpend
Media spend (currency units on one consistent basis)Source: Business record
fixedCampaignCost
Fixed campaign cost (currency units on one consistent basis)Source: Business record
totalCampaignCost
Total Campaign Cost (money)Source: Calculated output
fixedCampaignCost
Fixed campaign cost (currency units)Source: Business record
Campaign Profit
campaignProfit = incremental contribution − total campaign cost

Where

incrementalContribution
Incremental Contribution (money)Source: Calculated output
totalCampaignCost
Total Campaign Cost (money)Source: Calculated output
campaignProfit
Campaign Profit (money)Source: Calculated output
Roi
roi = campaign profit ÷ total campaign cost

Where

totalCampaignCost
Total Campaign Cost (money)Source: Calculated output
campaignProfit
Campaign Profit (money)Source: Calculated output
roi
Roi (percent)Source: Calculated output
Break Even Incremental Customers
breakEvenIncrementalCustomers = ceil(total cost ÷ contribution per incremental customer)

Where

contributionPerIncrementalCustomer
Contribution per incremental customer (currency units on one consistent basis)Source: Business record
incrementalCustomers
Incremental Customers (units)Source: Calculated output
incrementalContribution
Incremental Contribution (money)Source: Calculated output
breakEvenIncrementalCustomers
Break Even Incremental Customers (units)Source: Calculated output
Required Attributed Customers
requiredAttributedCustomers = ceil(break-even incremental customers ÷ incrementality)

Where

attributedCustomers
Attributed customers (whole or operational units)Source: Business record
incrementalCustomers
Incremental Customers (units)Source: Calculated output
breakEvenIncrementalCustomers
Break Even Incremental Customers (units)Source: Calculated output
requiredAttributedCustomers
Required Attributed Customers (units)Source: Calculated output
Maximum media spend
maximumSpend = max(0, expectedConversions × contributionPerConversion − fixedCampaignCost − targetContribution)

Where

fixedCampaignCost
Fixed campaign cost (currency units on one consistent basis)Source: Business record
totalCampaignCost
Total Campaign Cost (money)Source: Calculated output
expectedConversions
Expected conversions (whole conversions)Source: User assumption
contributionPerConversion
Contribution per conversion (currency units per conversion)Source: Business record
fixedCampaignCost
Fixed campaign cost (currency units)Source: Business record
targetContribution
Target contribution (currency units)Source: User decision
maximumSpend
Maximum media spend (currency units)Source: Calculated output
maximumCostPerConversion
Maximum cost per conversion (currency units per conversion)Source: Calculated output
max
Maximum operator (operator)Source: Calculated output
Maximum cost per conversion
maximumCostPerConversion = maximumSpend ÷ expectedConversions

Where

expectedConversions
Expected conversions (whole conversions)Source: User assumption
maximumSpend
Maximum media spend (currency units)Source: Calculated output
maximumCostPerConversion
Maximum cost per conversion (currency units per conversion)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

Worked values below come from the same registered engine and visible default assumptions.

Calculation and outputs

Example

Worked values below come from the same registered engine and visible default assumptions.

Incremental Customers
140
Incremental Contribution
5,600.00 currency units
Total Campaign Cost
3,500.00 currency units
Campaign Profit
2,100.00 currency units
Roi
60%
Break Even Incremental Customers
88
Required Attributed Customers
125

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

Campaign profit applies the entered incrementality assumption to attributed customers before subtracting all campaign costs.

3. Validation and boundary checks

  • All inputs must be finite and non-negative unless the formula explicitly permits a negative calculated profit or gap.
  • Rates must remain between 0% and 100%; horizons and declared counts use the exact whole-number boundaries shown by the inputs.
  • Zero denominators return an explicit unreachable state rather than Infinity, NaN or a numeric sentinel.
  • Compared records must use one consistent attribution, contribution, period and currency basis.

4. Assumptions and source classification

  • Retention, conversion, attribution and incrementality are user assumptions rather than causal claims.
  • Customer value is contribution-based and bounded to the selected finite horizon.
  • No provider rate, market benchmark, country rule or policy constant is embedded.
  • The embedded budget workflow is the inverse spend-ceiling view of the same campaign contribution engine.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The workflow does not forecast demand, retention, conversion or campaign performance.
  • It does not replace financial, accounting, tax or legal advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Related reading

Guides to interpret the decision and its assumptions.

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