Marketing Metrics: worked example
| Impressions | 250,000 |
|---|---|
| Clicks | 3,750 |
| Ad spend | $4,200 |
| Conversions | 150 |
| Click-through rate | 1.5% |
| Cost per click | $1.12 |
| Cost per 1,000 impressions | $17 |
| Cost per conversion | $28 |
Marketing Metrics: formula
Common error: Optimizing for click-through rate alone. A high rate on the wrong audience pays for visits that never turn into customers.
Use impressions, clicks, spend and counted conversions from the same campaign, period and attribution scope. A conversion can be a lead, order or other event; choose its definition before comparing campaigns. Enter the actual currency spend, not a bid or daily budget.
Marketing Metrics: changing Impressions
| Impressions | Click-through rate | Cost per click | Cost per 1,000 impressions | Cost per conversion |
|---|---|---|---|---|
| 200,000 | 1.9% | $1.12 | $21 | $28 |
| 225,000 | 1.7% | $1.12 | $19 | $28 |
| 250,000 (example) | 1.5% | $1.12 | $17 | $28 |
| 275,000 | 1.4% | $1.12 | $15 | $28 |
| 300,000 | 1.3% | $1.12 | $14 | $28 |
Marketing Metrics: compare input ranges
| Input | Tested from | To | Click-through rate: low input | Click-through rate: high input | Swing |
|---|---|---|---|---|---|
| Impressions | 225,000 | 275,000 | 1.7% | 1.4% | 0.303% (20%) |
| Clicks | 3,375 | 4,125 | 1.4% | 1.7% | 0.300% (20%) |
| Ad spend | $3,780 | $4,620 | 1.5% | 1.5% | 0.000% |
| Conversions | 135 | 165 | 1.5% | 1.5% | 0.000% |
Marketing Metrics: individual input comparisons
| Input | Value | Click-through rate | Cost per click | Cost per 1,000 impressions | Cost per conversion |
|---|---|---|---|---|---|
| Impressions | 200,000 | 1.9% | $1.12 | $21 | $28 |
| 225,000 | 1.7% | $1.12 | $19 | $28 | |
| 250,000 | 1.5% | $1.12 | $17 | $28 | |
| 275,000 | 1.4% | $1.12 | $15 | $28 | |
| 300,000 | 1.3% | $1.12 | $14 | $28 | |
| Clicks | 3,000 | 1.2% | $1.40 | $17 | $28 |
| 3,375 | 1.4% | $1.24 | $17 | $28 | |
| 3,750 | 1.5% | $1.12 | $17 | $28 | |
| 4,125 | 1.7% | $1.02 | $17 | $28 | |
| 4,500 | 1.8% | $0.93 | $17 | $28 | |
| Ad spend | $3,360 | 1.5% | $0.90 | $13 | $22 |
| $3,780 | 1.5% | $1.01 | $15 | $25 | |
| $4,200 | 1.5% | $1.12 | $17 | $28 | |
| $4,620 | 1.5% | $1.23 | $18 | $31 | |
| $5,040 | 1.5% | $1.34 | $20 | $34 | |
| Conversions | 120 | 1.5% | $1.12 | $17 | $35 |
| 135 | 1.5% | $1.12 | $17 | $31 | |
| 150 | 1.5% | $1.12 | $17 | $28 | |
| 165 | 1.5% | $1.12 | $17 | $25 | |
| 180 | 1.5% | $1.12 | $17 | $23 |
Marketing Metrics: combined input changes
| Impressions / Clicks | 3,000 | 3,750 | 4,500 |
|---|---|---|---|
| 200,000 | 1.5% | 1.9% | 2.3% |
| 225,000 | 1.3% | 1.7% | 2.0% |
| 250,000 | 1.2% | 1.5% | 1.8% |
| 275,000 | 1.1% | 1.4% | 1.6% |
| 300,000 | 1.0% | 1.3% | 1.5% |
Marketing Metrics: which assumptions move the result?
Marketing Metrics: values and definitions
| Quantity and definition | Value used |
|---|---|
| Impressions | 250,000 |
| Clicks | 3,750 |
| Ad spend | $4,200 |
| Conversions | 150 |
| Click-through rate | 1.5% |
| Cost per click | $1.12 |
| Cost per 1,000 impressions | $17 |
| Cost per conversion | $28 |
Marketing Metrics: half and double Impressions
| Impressions | Click-through rate |
|---|---|
| 125,000 | 3.0% |
| 250,000 | 1.5% |
| 500,000 | 0.750% |
With zero clicks, cost per click is undefined; with zero conversions, cost per conversion is undefined. The tool omits those derived amounts while retaining defined measures. A lead event differs from an acquired customer, and attributed events can include repeat actions.
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Four numbers describe an ad campaign from different sides. Click-through rate shows whether the ad draws attention, cost per click prices that attention, cost per thousand impressions prices reach, and cost per conversion prices the result. On 250,000 impressions, 3,750 clicks and $4,200 spent, the rates are 1.5 percent, $1.12 a click, $16.80 per thousand and $28 per conversion.
Compare campaigns on cost per conversion first. A cheap click that never converts is worse than an expensive one that does.
ROAS compares attributed conversion value with ad spend. A margin calculation also needs product costs and any other costs excluded from the entered spend. Revenue attributed to a campaign is not the same quantity as profit retained from it.
Revenue and marketing spending must cover the same attribution period for their profitability comparison to be meaningful.
What is a good click-through rate?
Compare campaigns with the same placement, audience, format and click definition. A rate from a different channel is not a universal target. Use clicks and impressions from the same period, then evaluate whether the resulting traffic produces valuable conversions.
What is the difference between CPC and CPM?
Cost per click is what you pay for each click, and cost per mille is what you pay for 1,000 impressions regardless of clicks.
Which metric matters most?
Cost per conversion, compared with the value of a conversion. The others help diagnose why it is high or low.