Here's a summarized description of the different ads and formulas on how to calculate them.
- CPM (Cost Per Mille) - (Cost / Impressions) x 1000 - The rate paid per thousand impressions when buying traffic.
- CPC (Cost per Click) - Cost x Clicks - The price paid for every click when buying traffic.
- CTR (Click Through Rate) - (Clicks / Impressions) x 100 - The percentage of people that click an advertisement they have displayed. For instance, if you show an ad to 100 people and 5 of them click, you have a 5% click-through rate. This example is highly simplified for training purposes; typical click-through rates are usually much lower and depend on the user segment, targeting, traffic source type, and other various factors.
- CR (Conversion Rate) - (Conversions / Clicks) x 100 - The percentage of users that view your offering or landing page and complete the desired action. For instance, if 100 users visit your site, and 10 of them sign up for your newsletter, your conversion rate would be 10%, assuming that newsletter sign-ups were the goal for the page.
- CPA (Cost Per Acquisition) -Cost / (Impressions x CTR x CR) - a marketing metric that measures the total cost of a customer completing a specific action. In other words, CPA indicates how much it costs to get a single customer down your sales funnel, from the first touch point to the ultimate conversion.
- CPL (Cost Per Lead) - Cost / Leads - Paying a publisher only when a user signs up for some promotion allowing you to contact them via whatever means were required by the campaign.
- ROAS (Return On Ad Spend) - Ad Money Earned / Ad Money Spent - is an important key performance indicator (KPI) in online and mobile marketing. It refers to the amount of revenue that is earned for every dollar spent on a campaign.
- ROI (Return on Investment) - (Money Gained - Money Spent) / Money Spent - A marketing campaign’s main purpose is to generate a profit for the company, client, product, or service being promoted. It is important to calculate that profit regularly throughout the process and monitor it on an ongoing basis by determining the campaign's ROI, or return on investment.ROI can be calculated by subtracting the advertising costs from the gross revenue and dividing the difference by the original advertising cost and multiplying by 100 for the percentage ROI.