Reference
50 Essential Advertising Calculations
The formulas every PPC, DSP, and retail media professional should know.
CTR — Click-Through Rate
CoreClicks ÷ Impressions × 100
500 clicks ÷ 100,000 impressions × 100 = 0.5%
CPC — Cost Per Click
CoreTotal 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
CoreTotal Ad Spend ÷ Total Conversions
$1,000 spend ÷ 20 sales = $50 CPA
CVR — Conversion Rate
CoreConversions ÷ Clicks × 100
20 conversions ÷ 500 clicks × 100 = 4%
ROAS — Return on Ad Spend
CoreRevenue ÷ 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
BiddingSelling 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
ProfitabilityRevenue − Variable Costs
$30 − $8 − $4.50 − $6 = $11.50
LTV — Customer Lifetime Value
AdvancedAvg Order Value × Purchase Frequency × Customer Lifespan
$50 × 4 × 3 years = $600 LTV
Max CPA (from LTV)
AdvancedLTV × Target Margin
$600 LTV × 30% margin = $180 max CPA
CPL — Cost Per Lead
CoreTotal Ad Spend ÷ Total Leads
$1,000 ÷ 50 leads = $20 CPL
Lead-to-Close Rate
CoreClosed Deals ÷ Total Leads × 100
5 deals ÷ 50 leads × 100 = 10%
Revenue Per Click
CoreRevenue ÷ Total Clicks
$10,000 ÷ 500 clicks = $20 RPC
Impression Share
Google AdsYour Impressions ÷ Total Eligible Impressions × 100
50,000 ÷ 200,000 × 100 = 25% IS
Quality Score Impact on CPC
Google AdsCompetitor Ad Rank ÷ Your QS + $0.01
Ad Rank 40 ÷ QS 8 + $0.01 = $5.01
Ad Rank
Google AdsMax 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
DSPViewable Impressions ÷ Total Impressions × 100
70,000 ÷ 100,000 × 100 = 70%
VCR — Video Completion Rate
DSPVideo Completions ÷ Video Starts × 100
8,000 ÷ 10,000 × 100 = 80%
CPCV — Cost Per Completed View
DSPAd Spend ÷ Completed Views
$500 ÷ 8,000 = $0.0625 CPCV
Frequency
DSPTotal Impressions ÷ Unique Reach
100,000 impressions ÷ 20,000 users = 5x frequency
Reach
DSPTotal 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
PlanningCurrent Spend ÷ Days Elapsed × Days in Month
$4,000 ÷ 15 × 30 = $8,000 projected
Share of Voice
AdvancedYour Impressions ÷ Total Market Impressions × 100
500,000 ÷ 5,000,000 × 100 = 10% SOV
NTB Rate — New-to-Brand
AmazonNTB Orders ÷ Total Ad Orders × 100
30 NTB ÷ 100 total × 100 = 30%
ASIN-Level ROAS
AmazonASIN Revenue ÷ ASIN Ad Spend
$5,000 ÷ $1,000 = 5x ROAS
Glance View Rate
AmazonGlance Views ÷ Impressions × 100
2,000 ÷ 100,000 × 100 = 2%
Unit Session Percentage
AmazonUnits Ordered ÷ Sessions × 100
150 units ÷ 3,000 sessions × 100 = 5%
Referral Fee
MarketplaceSelling 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)
MarketplacePrice − Referral Fee − FBA Fee − COGS
$30 − $4.50 − $6 − $8 = $11.50
Max Ad Spend per Unit
MarketplaceNet Proceeds before ads
$11.50 is the most you can spend on ads per unit sold
Blended ROAS
AdvancedTotal Revenue ÷ Total Ad Spend (all channels)
$50,000 ÷ $8,000 = 6.25x blended ROAS
MER — Marketing Efficiency Ratio
AdvancedTotal Revenue ÷ Total Marketing Spend
$500,000 ÷ $50,000 = 10x MER
CAC — Customer Acquisition Cost
AdvancedTotal Sales & Marketing Spend ÷ New Customers
$10,000 ÷ 100 new customers = $100 CAC
LTV:CAC Ratio
AdvancedCustomer LTV ÷ CAC
$600 LTV ÷ $100 CAC = 6:1 ratio
Payback Period
AdvancedCAC ÷ Monthly Gross Profit per Customer
$100 CAC ÷ $20/month = 5 months
CPO — Cost Per Order
CoreAd Spend ÷ Orders
$500 ÷ 25 orders = $20 CPO
AOV — Average Order Value
CoreTotal Revenue ÷ Total Orders
$10,000 ÷ 200 orders = $50 AOV
Revenue Per Session
CoreTotal Revenue ÷ Total Sessions
$10,000 ÷ 5,000 sessions = $2.00 RPS
Search Term Impression Share
AmazonYour ST Impressions ÷ Total ST Impressions × 100
5,000 ÷ 20,000 × 100 = 25%
Bid Adjustment for Placement
BiddingBase Bid × (1 + Modifier%)
$1.00 × (1 + 75%) = $1.75 adjusted bid
Target Impression Share Bid
Google AdsTarget IS × Avg CPC ÷ Current IS
80% × $2.00 ÷ 40% = $4.00 target bid
