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Simple PPC Math

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The process of running a successful PPC campaign covers a variety of different skills. Mathematics is one of them, so trying to understand all of the numbers and metrics can be a lot to take in or be headache inducing to say the least! Maybe you’re just starting out in the PPC world or maybe you feel a little bit rusty on the subject? Don’t panic! We’ve got just the thing that can help you understand the equations, what they mean and how you can use them.

Below is a list of the basic formulas you will need to get your head around during PPC management:

Click-Through-Rate (CTR) = Clicks / Impressions

This metric is important for helping you understand your ad copy performance and relevance

Cost-Per-Click (CPC) = Cost / Clicks

CPC is used to understand the average amount you are paying to achieve a click.

Cost-Per-Conversion / Acquisition (CPA) = Cost / Conversions

This formula is used to work out how much it costs you to convert a user into a customer.

Conversion Rate (CR%) = Conversions / Clicks

The percentage of customers you have converted from the amount of clicks you have.

Return on Ad Spend (ROAS) = Revenue / Cost

This metric allows you to see how efficient your campaign is and helps you to make informed decisions about where your money would be better invested.

Now let’s move on to some slightly more advanced equations.

Ad Index = CTR * CV%

Many managers miss this important formula out, but it is essential for understanding the true performance of your adverts. It allows you take into consideration the engagement on the ad (CTR) as well as on-site relevance and engagement (CR%) combined.

Available Impressions (Search) = Impressions / Lost IS (Search)%

This is the percentage of impressions that your ads receive compared to the total number that your ads could get. It’s a great way to see if your ads would reach more people if you increase your bid or budget. 

Projected Spend (monthly) = (MTD Spend / Current Days Of Month Gone) * Total Days In Month

You can apply this formula to any time period i.e. weekly and adjust days to see how much you’re projected outcome is for that time period.

So there you have it. PPC can be complex enough at times – and that’s without the numbers! But now that we have provided you with a better insight into basic PPC maths, you have a clearer understanding and you’re better equipped to do it yourself!

Good luck!!!

 

286 thoughts on “Simple PPC Math”

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