{"id":2410,"date":"2020-10-19T16:37:17","date_gmt":"2020-10-19T16:37:17","guid":{"rendered":"https:\/\/www.w3webschool.com\/blog\/?p=2410"},"modified":"2020-10-19T16:38:56","modified_gmt":"2020-10-19T16:38:56","slug":"ppc-formulas","status":"publish","type":"post","link":"https:\/\/www.w3webschool.com\/blog\/ppc-formulas\/","title":{"rendered":"PPC Formulas"},"content":{"rendered":"

Below there are the Formulas that will help you understand how\u00a0<\/b>Google Adwords<\/b>\u00a0costs are calculated and measured:<\/b><\/p>\n

1. How to Calculate Pay per click<\/b><\/p>\n

Ans.\u00a0 Pay per click\u00a0 = Advertising cost \/Number of ad clicks<\/p>\n

2. How to Calculate Ad Rank<\/b><\/p>\n

Ans:\u00a0 Ad Rank = max CPC bid * Quality Score<\/p>\n

Quality Score should be average 6 or above. Once your Quality Score and Ad Rank have been calculated,<\/p>\n

Google uses this data to determine how much you\u2019ll pay each time someone clicks on one of your ads. How does Ad rank impact Cost-Per-Click:<\/p>\n

3. How to Calculate CPM (Cost per Thousand Impressions)\u00a0<\/b>Ans. Cost per Thousand Impressions (CPM) is calculated\u00a0 dividing cost by impressions and multiplying it by 1000, or multiplying CTR by CPC by 1000. This is the formula to calculate CPM:<\/p>\n

CPM = Cost to an Advertiser x 1000 \/ Impressions<\/p>\n

CPM = CTR x CPC x 1000<\/p>\n

4. How to Calculate Impressions<\/b>
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\n<\/b>Ans.\u00a0<\/b>Impressions are calculated when dividing the total cost of the campaign by the result of CPM divided by 1000, or dividing the number of clicks by the CTR. This is the formula to calculate impressions:<\/p>\n

Impressions= Cost \/ CPM \/ 1000<\/p>\n

Impressions =\u00a0 \u00a0 \u00a0Clicks \/ CTR*100<\/p>\n

Ex: Clicks-15, CTR-0.40%\u00a0 \u00a0Impressions = 15\/0.40%=3750<\/p>\n

5. How to Calculate CTR (Click-Through Rate<\/b>)<\/p>\n

Ans. Click-through Rate (CTR) is calculated dividing clicks by impressions, or dividing CPM by 1000, and then dividing its result by CPC. This is the formula to calculate CTR:<\/p>\n

CTR =\u00a0 \u00a0 \u00a0Clicks \/ Impressions * 100<\/p>\n

CTR =\u00a0 \u00a0 \u00a0CPM \/ 1000 \/ CPC<\/p>\n

EX:\u00a0 Clicks-281 Impression-15000\u00a0 \u00a0CTR=743\/15000=1.87%<\/p>\n

6. How to Calculate the Budget or\u00a0<\/b>Cost<\/b>\u00a0of a CPC, CPA or CPM Campaign<\/b><\/p>\n

Ans. The total budget\/cost of a campaign is calculated\u00a0 multiplying Cost per Action (CPA) by conversions, Cost per Click (CPC) by clicks, or dividing CPM by 1000 and multiplying it by impressions. This is the formula to calculate the budget\/cost of a campaign:<\/p>\n

Budget = CPA x Conversions<\/p>\n

Budget = CPC x Clicks<\/p>\n

Budget = CPM x Impressions \/ 1000<\/p>\n

or,
\nCost = CPA x Conversions<\/p>\n

Cost = CPC x Clicks<\/p>\n

Cost =\u00a0 \u00a0CPM x Impressions \/ 1000<\/p>\n

Ex: Clicks-15\u00a0 CPC-$2.5\u00a0 \u00a0 \u00a0Cost\/Budget=$2.5*15=$37.5<\/p>\n

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7. How to Calculate CPC<\/b><\/p>\n

Ans. Cost per Click (CPC) is calculated dividing Cost by number of Clicks, multiplying Conversion Rate by Cost per Acquisition (CPA) or Cost per Lead (CPL), or dividing CPM by 1000, and then dividing its result by Click-through-Rate (CTR). This is the formula to calculate CPC:<\/p>\n

CPC =\u00a0 \u00a0 Cost \/ Clicks
\nCPC = Conversion Rate x CPA
\nCPC =\u00a0 \u00a0 CPM \/ 1000 \/ CTR<\/p>\n

Ex:\u00a0 Clicks-250 , Total Cost-$1000\u00a0 \u00a0CPC=$1000\/250= $4<\/p>\n

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8. How to Calculate Cost per Conversion OR\u00a0<\/b>CPL (cost per lead)Ans: Cost per conversion is calculated dividing cost by conversions, or dividing cost per click (CPC) by conversion rate. These are the formulas to calculate cost per conversion:<\/p>\n

Cost per conversion =\u00a0 \u00a0 \u00a0Cost \/ Conversions<\/p>\n

Cost per conversion =\u00a0 \u00a0 \u00a0CPC \/ Conversion Rate<\/p>\n<\/div>\n

9. How to Calculate Conversion Rate OR\u00a0<\/b>Lead Rate<\/b><\/div>\n
<\/div>\n
Ans: Conversion Rate is calculated dividing Cost per Click (CPC) by Cost per Action (CPA, CPL, CPD, etc.), or dividing conversions by clicks. This is the formula to calculate the conversion rate:<\/div>\n
<\/div>\n
Conversion Rate = CPC \/ CPA<\/div>\n
<\/div>\n
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Conversion Rate = Conversions \/ Clicks<\/p>\n

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Lead-2\u00a0 clicks-13\u00a0 \u00a0 \u00a0 \u00a0lead rate=2\/13=15.38%<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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10. How to Calculate Conversions OR\u00a0<\/b>\u00a0Leads<\/b><\/div>\n
<\/div>\n
Ans: Conversions are calculated multiplying Clicks by Conversion Rate, or dividing Cost by Cost per Action (CPA). This is the formula to calculate conversions:<\/div>\n
<\/div>\n
Conversions = Clicks x Conversion Rate<\/div>\n
<\/div>\n
Conversions =\u00a0 \u00a0 \u00a0Cost \/ CPA<\/div>\n<\/div>\n
\n
Lead rate-24.56% clicks-281\u00a0 \u00a0 leads=24.56%*281=69<\/div>\n<\/div>\n

\u00a0l1. How to Calculate Clicks<\/b><\/p>\n

Ans: Clicks are calculated by dividing conversions by Conversion Rate, dividing cost by Cost per Click (CPC), or multiplying impressions by Click-Through-Rate (CTR). This is the formula to calculate clicks:<\/p>\n

Clicks = Conversions \/ Conversion Rate<\/p>\n

Clicks = Cost \/ CPC<\/p>\n

Clicks = Impressions x CTR<\/p>\n

Ex:\u00a0 \u00a0 Impression-20000\u00a0 CTR-1.25%\u00a0 \u00a0Clicks=20000*1.25%=160<\/p>\n

12. How to Calculate CPA (Cost per Acquisition)<\/b><\/p>\n

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<\/div>\n
\u00a0Ans: CPA (Cost per Acquisition) is calculated dividing cost by a number of conversions, or dividing cost per click (CPC) by conversion rate. This is the formula to calculate CPA:<\/div>\n
<\/div>\n
CPA =\u00a0 \u00a0 \u00a0Cost \/ Conversions<\/div>\n
<\/div>\n
CPA =\u00a0 \u00a0 \u00a0CPC \/ Conversion Rate<\/div>\n<\/div>\n
\u00a0<\/b><\/div>\n
<\/div>\n
13. How to Calculate Total Cost<\/b><\/div>\n
\n
<\/div>\n
Ans: Total Cost = Clicks x Average cost per click<\/div>\n
<\/div>\n
\n

Ex: Clicks: 15\u00a0 \u00a0 \u00a0Average cost per click: $2.5\u00a0 Total Cost = 15* $2.5 = $37.5<\/p>\n<\/div>\n<\/div>\n

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14. How to Calculate Total Revenue<\/b><\/div>\n
<\/div>\n
Ans:\u00a0 Total Revenue= Revenue per leads x leads<\/div>\n
<\/div>\n
\n

Ex: Revenue per leads = $20\u00a0 \u00a0leads= 5\u00a0 \u00a0 Total Revenue = $20*5 = $100<\/p>\n<\/div>\n<\/div>\n

\u00a0<\/b><\/div>\n
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15. How to Calculate Return on Ad Spend (ROAS)\u00a0<\/b><\/div>\n
<\/div>\n
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Ans:\u00a0 Return on Ad Spend (ROAS) =\u00a0 Profit from ad campaign \/ Cost of ad campaign<\/p>\n

Ex.
\nRevenue: $10,000
\n___________________ ROAS = $5 OR 5:1<\/p>\n

Cost: $2000<\/p>\n<\/div>\n<\/div>\n

<\/div>\n
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16. How to Calculate ROI( return on investment)<\/b><\/div>\n
<\/div>\n
\n

Ans:\u00a0 \u00a0ROI =\u00a0 (Revenue – Cost of goods sold) \/ Cost of goods sold<\/p>\n<\/div>\n<\/div>\n

<\/div>\n
17. How to Calculate CPV (Cost-per-view)<\/b><\/div>\n
<\/div>\n
Ans:\u00a0 CPV is calculated by dividing total cost by views on Youtube. This is the formula to calculate CPV:<\/div>\n
<\/div>\n
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CPV =\u00a0 \u00a0 Cost \/ Views<\/p>\n<\/div>\n

<\/div>\n
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18. How to Calculate CPV (Cost Per Visit)<\/b><\/div>\n
<\/div>\n
Ans:\u00a0 \u00a0Cost Per Visit = Campaign Cost \/ Number of visitors<\/div>\n<\/div>\n
<\/div>\n
19. Calculate Impression Share<\/b><\/div>\n
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