Retail Media Margin Assurance Calculator

Validate that retail media profits hold after subtracting cannibalised product margin, platform fees, and fulfillment drag. Provide monthly ad revenue, margin erosion, fee percentage, and incremental fulfillment costs to see the resulting contribution dollars, the contribution rate, and how much cost drag is eating into topline gains. Use the output to pressure-test program profitability before ramping spend or promising financial guarantees to brands.

Gross ad revenue credited to your retail media program for the month in review.
Contribution margin lost due to promotional pricing, subsidised discounts, or cannibalised core sales.
Percentage of ad revenue paid to adtech partners, marketplaces, or media networks.
Incremental fulfillment, returns, or customer service costs tied to the incremental demand.

Outputs assume linear attribution between ads and downstream orders. Pair with incrementality studies and finance reviews before adjusting spend commitments or promising guarantees.

Examples

  • $620,000 revenue, $150,000 erosion, 18% fees, $40,000 fulfillment ⇒ Fees total $111,600.00 and net contribution remains $318,400.00 for a 51.35% contribution rate.
  • $280,000 revenue, $110,000 erosion, 22% fees, $28,000 fulfillment ⇒ Net margin falls to $80,400.00 and contribution rate slips to 28.71%, signalling caution.
  • $450,000 revenue, $95,000 erosion, 15% fees, $60,000 fulfillment ⇒ Total drag consumes 40.33% of revenue, leaving $268,500.00 in contribution at a 59.67% rate.

FAQ

Should I include media rebates?

Subtract rebates from margin erosion or fulfillment costs so the calculator reflects net economics after incentives.

How often should I update fee percentages?

Refresh the fee input whenever marketplace agreements change or when onboarding new adtech vendors.

Can I model multiple regions?

Run the calculator for each market and sum the net contributions to see consolidated profitability.

Where should I capture retail media team salaries?

Add fixed operating expenses, such as headcount or analytics tools, to the margin erosion field so the model reflects the total cost to run the program.

How do I treat vendor-funded promotions that offset erosion?

Reduce the erosion input by the amount vendors reimburse. If reimbursements flow through as revenue instead, include them in gross ad revenue and adjust erosion accordingly.

Additional Information

  • Platform fees are calculated as a percentage of gross retail media revenue to reflect ad network rev-shares and tech fees.
  • Margin erosion should include discounts, promo funding, or cannibalised organic sales attributed to the media program.
  • Fulfillment drag captures higher shipping, returns, or support costs triggered by incremental orders.
  • Contribution rate equals net contribution divided by ad revenue to reveal the percentage of monetisation that survives after all costs.
  • Cost drag percentage helps benchmark program health against internal hurdle rates or promised guarantees to participating brands.

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