PPC Equations You Should Know
By Rachel Anderson
PPC is very number-centric. It’s critical to understand how numbers work together and how each component is calculated. Once you know how things work better, you’ll be able to figure out just how you need to adjust things for the desired result. And, you won’t need every value given to you to be able to do it. You’ll be able to predict the outcome of many situations with the data you do have.
Today I’ll start with some very basic equations.
Impressions
Definition: How often an ad is shown; each time your ad shows counts as one impression.
Formula: Impressions= Clicks/CTR x 100
Example:
Impressions= 13/0.65% x 100
Impressions= 2000
Clicks
Definition: The number of users sent to your site because they clicked on your ad.
Formula: Clicks= (Impressions x CTR) / 100
Example:
Clicks= (30000 x 1.15%) / 100
Clicks= 345
Click-through Rate
Definition: The ratio of how often someone who sees your ad clicks on it.
Formula: CTR= (Clicks/ Impressions) x 100
Example:
CTR= (281/15000) x 100
CTR= 1.87%
Average Cost Per Click
Definition: The average amount you’ve been charged for a click.
Formula: Avg. CPC= (Total Cost / Clicks)
Example:
Avg. CPC= ($347.44 / 345)
Avg. CPC= $1.01
Are there equations you would like to understand better? Leave a comment and let me know! 🙂
Rachel Anderson is a Pay Per Click Advertising Strategist at Netmark.com. Off the job she enjoys photography, good food, being outside, and spending time with her husband. Share your thoughts with Rachel on Twitter @gladygirl, Google+ or Facebook- she’d love to hear from you!
