PPC Basic Formula

1. PPC(PAY PER CLICK) BASIC
FORMULAS
Lalitendu Sahoo

2. Pay Per Click Basic Formula
 How to find Impression (Impression refers to when your ad is shown on a search results page after
being triggered by a user's search query.) (Searches)
 Find Impression data based on clicks and CTR data
Impression = Clicks / CTR *100
Impressions = ?
Clicks: 15
CTR: 0.40%
ie. 15 / 0.40% *100 = 3750

3. Pay Per Click Basic Formula
 How to find Clicks
 Find clicks data based on Impression and CTR(Click Through Rate is a measure of the number of clicks received
from the number of ad impressions delivered.)
Clicks = (Impression * CTR) / 100
Impressions: 20000
Clicks ?
CTR: 1.25%
ie. 20000 / 1.25% = 160

4. Pay Per Click Basic Formula
 How to find leads(people who click from an ad and then complete an inquiry form is considered to be a
lead. The advertiser would pay based on the number leads received.) (conversion)
 Find leads based on leads rate and clicks
Leads = (Leads rate * clicks) / 100
Lead Rate: 33.64
Clicks: 156
Leads: ?
ie. (33.64% * 156) /100 = 52.47

5. Pay Per Click Basic Formula
 How to find CTR (Click Through Rate is a measure of the number of clicks received from the number of ad
impressions delivered.)
 Find CTR based on Impression and clicks
CTR = (Clicks / Impression) * 100
Impressions: 8000
Clicks: 170
CTR: ?
ie. (170/ 8000) *100 = 2.12%

6. Pay Per Click Basic Formula
 How to find Lead Rate
 Find lead rate based on clicks and leads detail
Lead Rate = (leads / clicks) *100
Lead: 5
Click: 18
Lead Rate: ?
ie. (5 / 18) * 100 = 27.77%

7. Pay Per Click Basic Formula
 How to find Average cost per click
 Find average cost per click based on Total cost and clicks
Average Cost per Click = (Total Cost / Clicks)
Total Cost: $1000
Clicks: 250
Average Cost per Click: ?
ie. ($1000 / 250) = $4

8. Pay Per Click Basic Formula
 How to find Total cost
 Find total cost based on clicks and average cost per click
Total Cost = Clicks * Average cost per click
Total Cost: ?
Clicks: 15
Average Cost per Click: $2.5
ie. (15 * $2.5) = $37.5

9. Pay Per Click Basic Formula
 How to find Total Revenue
 Find total revenue based on revenue per leads and clicks
Total Revenue = Revenue per lead * leads
Total Revenue: ?
Lead: 5
Revenue per Lead: $20
ie. (20$ * 5) = $100

10. Pay Per Click Basic Formula
 How to find Margin$ amount
 Find margin amount in $ based on Total Revenue and Total cost
Margin$ = Total Revenue – Total Cost
Margin: ?
Total Revenue: 100$
Total Cost: 80$
ie. $100 - $80 = $20

11. Pay Per Click Basic Formula
 How to find Margin$ amount
 Margin %: the profit represented as a percentage from dividing the margin dollar by the total revenue
Margin in % = Margin in $ / Total revenue
Margin: 20$
Total Revenue: 100$
ie. $20 / $100 = 20%

12. Pay Per Click Basic Formula
Q&A