PPC Basic Formula

PPC(PAY PER CLICK) BASIC FORMULAS

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How to find Impression (Impression refers to when your ad is shown on a search results page after being triggered by a user's search query.) (Searches)

Find Impression data based on clicks and CTR data

Impression = Clicks / CTR *100

ie. 15 / 0.40% *100 = 3750

Pay Per Click Basic Formula

Impressions = ?

Clicks: 15

CTR: 0.40%

How to find Clicks

Find clicks data based on Impression and CTR(Click Through Rate is a measure of the number of clicks received from the number of ad impressions delivered.)

Clicks = (Impression * CTR) / 100

ie. 20000 / 1.25% = 160


Impressions: 20000

Clicks ?

CTR: 1.25%

How to find leads(people who click from an ad and then complete an inquiry form is considered to be a lead. The advertiser would pay based on the number leads received.) (conversion)

Find leads based on leads rate and clicks

Leads = (Leads rate * clicks) / 100

ie. (33.64% * 156) /100 = 52.47


Lead Rate: 33.64

Clicks: 156

Leads: ?

How to find CTR (Click Through Rate is a measure of the number of clicks received from the number of ad impressions delivered.)

Find CTR based on Impression and clicks

CTR = (Clicks / Impression) * 100

ie. (170/ 8000) *100 = 2.12%


Impressions: 8000

Clicks: 170

CTR: ?

How to find Lead Rate

Find lead rate based on clicks and leads detail

Lead Rate = (leads / clicks) *100

ie. (5 / 18) * 100 = 27.77%


Lead: 5

Click: 18

Lead Rate: ?

How to find Average cost per click

Find average cost per click based on Total cost and clicks

Average Cost per Click = (Total Cost / Clicks)

ie. ($1000 / 250) = $4


Total Cost: $1000

Clicks: 250

Average Cost per Click: ?

How to find Total cost

Find total cost based on clicks and average cost per click

Total Cost = Clicks * Average cost per click

ie. (15 * $2.5) = $37.5


Total Cost: ?

Clicks: 15

Average Cost per Click: $2.5

How to find Total Revenue Find total revenue based on revenue per leads and clicks

Total Revenue = Revenue per lead * leads

ie. (20$ * 5) = $100


Total Revenue: ?

Lead: 5

Revenue per Lead: $20

How to find Margin$ amount Find margin amount in $ based on Total Revenue and Total cost

Margin$ = Total Revenue – Total Cost

ie. $100 - $80 = $20


Margin: ?

Total Revenue: 100$

Total Cost: 80$

How to find Margin$ amount Margin %: the profit represented as a percentage from dividing the margin dollar by the total revenue

Margin in % = Margin in $ / Total revenue

ie. $20 / $100 = 20%


Margin: 20$

Total Revenue: 100$

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PPC Basic Formula

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