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Reference

50 Essential Advertising Calculations

The formulas every PPC, DSP, and retail media professional should know.

CTR — Click-Through Rate

Core

Clicks ÷ Impressions × 100

500 clicks ÷ 100,000 impressions × 100 = 0.5%

CPC — Cost Per Click

Core

Total Ad Spend ÷ Total Clicks

$500 spend ÷ 250 clicks = $2.00 CPC

CPM — Cost Per 1,000 Impressions

Core

(Ad Spend ÷ Impressions) × 1,000

($500 ÷ 100,000) × 1,000 = $5.00 CPM

CPA — Cost Per Acquisition

Core

Total Ad Spend ÷ Total Conversions

$1,000 spend ÷ 20 sales = $50 CPA

CVR — Conversion Rate

Core

Conversions ÷ Clicks × 100

20 conversions ÷ 500 clicks × 100 = 4%

ROAS — Return on Ad Spend

Core

Revenue ÷ Ad Spend

$10,000 revenue ÷ $2,500 spend = 4x ROAS

ACoS — Advertising Cost of Sale

Amazon

(Ad Spend ÷ Revenue) × 100

($2,500 ÷ $10,000) × 100 = 25% ACoS

TACoS — Total ACoS

Amazon

(Ad Spend ÷ Total Revenue) × 100

$2,500 ÷ $20,000 total revenue = 12.5%

ROI — Return on Investment

Core

(Revenue − Cost) ÷ Cost × 100

($10,000 − $6,000) ÷ $6,000 × 100 = 66.7%

Max CPC Bid

Bidding

Selling Price × Target ACoS × CVR

$30 × 25% × 3% = $0.225 max CPC

Breakeven ACoS

Profitability

(Price − COGS − Fees) ÷ Price × 100

($30 − $8 − $4.50) ÷ $30 × 100 = 25%

Gross Margin

Profitability

(Revenue − COGS) ÷ Revenue × 100

($30 − $8) ÷ $30 × 100 = 73.3%

Contribution Margin

Profitability

Revenue − Variable Costs

$30 − $8 − $4.50 − $6 = $11.50

LTV — Customer Lifetime Value

Advanced

Avg Order Value × Purchase Frequency × Customer Lifespan

$50 × 4 × 3 years = $600 LTV

Max CPA (from LTV)

Advanced

LTV × Target Margin

$600 LTV × 30% margin = $180 max CPA

CPL — Cost Per Lead

Core

Total Ad Spend ÷ Total Leads

$1,000 ÷ 50 leads = $20 CPL

Lead-to-Close Rate

Core

Closed Deals ÷ Total Leads × 100

5 deals ÷ 50 leads × 100 = 10%

Revenue Per Click

Core

Revenue ÷ Total Clicks

$10,000 ÷ 500 clicks = $20 RPC

Impression Share

Google Ads

Your Impressions ÷ Total Eligible Impressions × 100

50,000 ÷ 200,000 × 100 = 25% IS

Quality Score Impact on CPC

Google Ads

Competitor Ad Rank ÷ Your QS + $0.01

Ad Rank 40 ÷ QS 8 + $0.01 = $5.01

Ad Rank

Google Ads

Max CPC Bid × Quality Score

$2.00 × QS 8 = Ad Rank 16

Effective CPM (eCPM)

DSP

(Total Earnings ÷ Total Impressions) × 1,000

($50 ÷ 10,000) × 1,000 = $5 eCPM

Viewability Rate

DSP

Viewable Impressions ÷ Total Impressions × 100

70,000 ÷ 100,000 × 100 = 70%

VCR — Video Completion Rate

DSP

Video Completions ÷ Video Starts × 100

8,000 ÷ 10,000 × 100 = 80%

CPCV — Cost Per Completed View

DSP

Ad Spend ÷ Completed Views

$500 ÷ 8,000 = $0.0625 CPCV

Frequency

DSP

Total Impressions ÷ Unique Reach

100,000 impressions ÷ 20,000 users = 5x frequency

Reach

DSP

Total Impressions ÷ Frequency

100,000 ÷ 5 = 20,000 unique users

Budget Pacing (Daily Target)

Planning

(Monthly Budget − Spend to Date) ÷ Days Remaining

($10,000 − $4,000) ÷ 15 days = $400/day

Pacing Percentage

Planning

(Actual Spend ÷ Expected Spend) × 100

($4,000 ÷ $5,000 expected) × 100 = 80% paced

Projected Month-End Spend

Planning

Current Spend ÷ Days Elapsed × Days in Month

$4,000 ÷ 15 × 30 = $8,000 projected

Share of Voice

Advanced

Your Impressions ÷ Total Market Impressions × 100

500,000 ÷ 5,000,000 × 100 = 10% SOV

NTB Rate — New-to-Brand

Amazon

NTB Orders ÷ Total Ad Orders × 100

30 NTB ÷ 100 total × 100 = 30%

ASIN-Level ROAS

Amazon

ASIN Revenue ÷ ASIN Ad Spend

$5,000 ÷ $1,000 = 5x ROAS

Glance View Rate

Amazon

Glance Views ÷ Impressions × 100

2,000 ÷ 100,000 × 100 = 2%

Unit Session Percentage

Amazon

Units Ordered ÷ Sessions × 100

150 units ÷ 3,000 sessions × 100 = 5%

Referral Fee

Marketplace

Selling Price × Referral Fee %

$30 × 15% = $4.50 referral fee

FBA Fee as % of Revenue

Marketplace

(FBA Fee ÷ Selling Price) × 100

($6 ÷ $30) × 100 = 20%

Net Proceeds (Amazon SC)

Marketplace

Price − Referral Fee − FBA Fee − COGS

$30 − $4.50 − $6 − $8 = $11.50

Max Ad Spend per Unit

Marketplace

Net Proceeds before ads

$11.50 is the most you can spend on ads per unit sold

Blended ROAS

Advanced

Total Revenue ÷ Total Ad Spend (all channels)

$50,000 ÷ $8,000 = 6.25x blended ROAS

MER — Marketing Efficiency Ratio

Advanced

Total Revenue ÷ Total Marketing Spend

$500,000 ÷ $50,000 = 10x MER

CAC — Customer Acquisition Cost

Advanced

Total Sales & Marketing Spend ÷ New Customers

$10,000 ÷ 100 new customers = $100 CAC

LTV:CAC Ratio

Advanced

Customer LTV ÷ CAC

$600 LTV ÷ $100 CAC = 6:1 ratio

Payback Period

Advanced

CAC ÷ Monthly Gross Profit per Customer

$100 CAC ÷ $20/month = 5 months

CPO — Cost Per Order

Core

Ad Spend ÷ Orders

$500 ÷ 25 orders = $20 CPO

AOV — Average Order Value

Core

Total Revenue ÷ Total Orders

$10,000 ÷ 200 orders = $50 AOV

Revenue Per Session

Core

Total Revenue ÷ Total Sessions

$10,000 ÷ 5,000 sessions = $2.00 RPS

Search Term Impression Share

Amazon

Your ST Impressions ÷ Total ST Impressions × 100

5,000 ÷ 20,000 × 100 = 25%

Bid Adjustment for Placement

Bidding

Base Bid × (1 + Modifier%)

$1.00 × (1 + 75%) = $1.75 adjusted bid

Target Impression Share Bid

Google Ads

Target IS × Avg CPC ÷ Current IS

80% × $2.00 ÷ 40% = $4.00 target bid