Here is a handy Reference Sheet that shows how to calculate ROI, Conversion Rate, and other specific online metrics. These calculations are applicable for Search Engine Marketing, or any Pay per Click campaign.
1) To calculate Cost per Acquisition (CPA):
CPC/Conversion Rate
2) To calculate CPC:
Cost of Acquisition*Conversion Rate
3) To calculate Conversion Rate:
CPC/Cost of Acquisition
4) To calculate the # of Conversions:
Total Clicks * Conversion Rate
5) To calculate ROAS (Return on Advertising Spend):
• (Revenue-Advertising Cost)/ Advertising Cost
Then, multiply the ROAS by 100 to express as a percentage.
6) To calculate: Average CPC:
Total Cost/Total Clicks
If you are in the Lead Generation business, and you have a call center, then there are additional metrics and calculations to take into consideration. The percentages need to be based on actual call center numbers.
For example,
Lead Generation Assumptions (hypothetical):
• Click to Web Form Contact percentage=1%
• Contact Form to Lead percentage=35%
• Lead to Conversion percentage=4%
1) To calculate # of Contacts:
Click to Contact % * Total Clicks
2) To calculate the # of Leads:
# of Contacts * Contact to Lead percentage
3) To calculate the # of Conversions:
# of Leads * Lead to Conversion percentage
4) To calculate Cost Per Lead:
Cost/Leads
To improve your online metrics there are various PPC Strategies to experiment with.
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Here is another good one for you. Cost per net click. This formula figures in bounce rates to determine how much ‘good’ PPC clicks are costing you.
Total Cost for Clicks / (Number of Clicks * (100% – Bounce Rate%))
Calculating CTR is not difficulty at all. All you need are the ad impressions and the clicks that ad received and the formula:
Clicks / Ad Impressions= CTR
A website with 100 impressions and 1 click would have a ctr of 1%. A website with 1000 impressions and 1 click would have a ctr of 0.1%. A website with 2345 impressions and 46 clicks would have a ctr of 1.96%.
The first three digits of the CTR are placed before the decimal point while the remaining are placed after it.
For a CPC advertising what CTR is ideal!
It should be 1.00% +.
Interested in learning more about calculating the value of a web lead? Check out http://goo.gl/0d5JW.
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