8 PPC Formulas That Will Ease Your Life

Posted: April 19

Learn some Math they say, it would be useful they say.

And it is, especially for Amazon PPC calculations.

Here are 8 formulas that will ease your life!

 

Click-through-rate (CTR) = (Total Clicks/Total Impressions) x 100

 

  • this metric shows how engaging your ad is for a specific keyword.

 

Conversion rate (CVR) = (Total Conversions/Total Clicks) x 100

 

  • how many of your ads successfully lead to sales

 

Advertising Cost of Sales (ACoS) = (Total Ad Spend/Total Sales Revenue) x 100

 

  • the cost of your ads

 

Total Advertising Cost of Sales (TACoS) = Total Ad Sales/Total Revenue Sales) x 100

 

  • your total ad spend compared to the total revenue you get (including organic sales)

 

Return on Ad Spend (RoAS) = Total Sales/Total Ad Spend

 

  • the revenue you earned for each $ spent on advertising

 

Cost Per Acquisition (or Cost Per Sale)  (CPA) = Total Ad Spend/Total Conversions. We can separate 2 different types of CPA.

 

  • when talking about PPC ONLY – CPA measures the ad spent for 1 PPC sale (including organic sales)

  • the general metric measures the total ad spend for 1 sale.


Cost-Per-Click (CPC) = Total Ad Spend/Total Clicks

  • how much would you pay when customers click on your ad.

Breakeven ACoS = Cost of Goods Sold + Advertising Cost per Sale/Sale price

  • the ACOS percentage at which the business is not making a profit or a loss (working on 0).

 

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