Definition
Email margin by campaign measures the profit margin of each individual email campaign, calculated by subtracting the campaign's costs from its attributed revenue and expressing the result as a percentage of revenue. Unlike revenue, which ignores expenses, margin reveals how much profit a campaign actually produces. Margin-by-campaign analysis shows which sends are truly profitable and which merely generate revenue at a loss.
How It Works
Revenue tells only half the story. A campaign can generate substantial revenue yet still lose money once its costs are accounted for. Margin-by-campaign analysis closes that gap.
- Attributed revenue — the revenue credited to the campaign through email-attribution.
- Direct costs — expenses specific to the campaign, such as design, copywriting, incentives, and any incremental platform fees.
- Cost of goods — for product campaigns, the variable cost of the goods sold is also subtracted to reflect true profit.
The result is a percentage margin that can be compared across campaigns. This is the campaign-level view of email-margin, and it is essential for steering investment toward profitable sends and away from loss-makers.
How to Calculate
Calculate campaign margin in four steps:
- Measure revenue — record the campaign's attributed revenue.
- Total the costs — sum the campaign's direct costs and any cost of goods sold.
- Subtract — subtract costs from revenue to get profit.
- Divide — divide profit by revenue and multiply by 100.
Campaign Margin = (Campaign Revenue - Campaign Costs) / Campaign Revenue x 100
| Variable | Description |
|---|---|
| Campaign Revenue | Revenue attributed to the campaign |
| Campaign Costs | Direct costs plus cost of goods sold |
Example
A campaign generates £20,000 in attributed revenue. Direct production costs are £1,500 and the cost of goods sold is £10,500, for total costs of £12,000. Profit is £8,000, and dividing by £20,000 gives a campaign margin of 40%. Comparing this against other campaigns reveals which offers are most profitable.
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Frequently Asked Questions
Campaign margin expresses profit as a percentage of revenue, while email-roi expresses profit as a percentage of cost. Margin answers "what share of revenue is profit," while ROI answers "how much did I earn per pound spent."
Include direct production costs and the cost of goods sold. For a complete view, a share of fixed overhead such as platform and staff costs can also be allocated, though many teams track direct margin first.
Revenue ignores costs, so a campaign can look successful while losing money. Margin reveals profitability, which is what ultimately sustains an email program.
By ranking campaigns by margin, a sender can shift budget and send frequency toward the most profitable offers and reduce or redesign those with weak or negative margins.