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How Do You Figure?

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.


Definition: How often an ad is shown; each time your ad shows counts as one impression.

Formula: Impressions= Clicks/CTR x 100



Impressions= 13/0.65% x 100

Impressions= 2000



Definition: The number of users sent to your site because they clicked on your ad.

Formula: Clicks= (Impressions x CTR) / 100



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



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)



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 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!