Pay per click FormulaPay-per-Click Formula
Three simple PPC formulations that have proved their worth to reduce your cost.
The first is the delineation of coca, or costs per conversion: Costs are determined by the number of hits your advertisements receive, times your per click-costs. Your convert is just the number of hits you get times your convert ratio. Both the counter and the Denominator contain the number of mouse and keyboard strokes.
As long as we know how high our exchange rates are, we can ensure that we reach our target set by the CA. Again, let's simply begin by defining ROAS or ROAS for Ad Expend: The costs are the same as before, the number of hits your advertisements receive times your per click-costs.
It is the number of purchases (or conversions) you receive times the mean order value (AOV) of those purchases. To take this one stage further, we've already mentioned that you can write your own customizations by multiplying the number of hits you get by your customization number. Here, too, we find mouse klicks in both the counter and the common denominator. Here, too, we find mouse klicks in both the counter and the commondenominator.
So, if we know now what our target ROAS is, we can resolve the costs for the costs we should pay per click: We now know everything to define our offering to ensure that we achieve our ROAS target. E.g. if we had to achieve a ROAS target of 4. 0, our mean price is $150, and we are converting our trade at 2%, then we know we have to pay. 02 x $150 / 4. 0 = $0. 75 CPC.
Maximising profits, the CEO's dreams. Again, let's just begin with a definition: Turnover is the result of your clicking, your converting rates and the mean order value. The editions are the result of Klicks and CPC. If you have extra cost for the production and shipping of your item, you should also state this here!
We will only take the derivation of the winnings in relation to the number of hits that our advertisements receive. Well, let's figure it out for the best win. If you set this derivate to 0, it will make sure that we find the maximal return we can make from our campaign: >Now it is easy for us to find the highest CPC offer that will maximize our profit:
It' easy to set your CPC bid to maximise profits! A little computing power was needed to get there, but all you need is the result of your exchange rates and your order averages. So, if you convert the 2% of your audience and your avg was $150, it means your campaign is most profitably at $3 CPC.
Under $3 CPC and we make more profits per selling, but less revenue. Much more than that and we make more revenue, but lose with every further gain. Those formula are scientifically proved to achieve your promotional objectives!