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Key Formulas for Understanding Your PPC campaign?

Pay-per-click advertising is a highly targeted and effective marketing tool, but to understand how it can work for you, there are certain metrics you need to track and formulas you need to know to calculate the true value of your PPC Campaigns
Two of the most relevant formulas you need are Cost Per Click (CPC) and Return On Investment (ROI), but within those categories, there are several related formulas that will give you a better understanding of your PPC performance.

Cost Per Click

One of the most important calculations you need when it comes to a pay-per-click campaign is cost per click because this will tell you the exact cost of every click. Here’s the simple formula to determine cost per click:

Total Cost / Number of Clicks

For example, if you spent $250 on the entire campaign and generated 200 clicks, your cost per click would be $1.25 (which is quite low compared to the average CPC of $2.14). That means each of those 200 new (possible) leads only cost you $1.25.

Related Formula: Click-Through Rate

The click-through rate is important because it acts as a bridge between your CPC and CPM. The CTR tells you how many people see the ad versus how many actually click, and you can calculate it with this formula:


(Number of Clicks / Number of Impressions) x 100

So if your $250 campaign generated 9,000 impressions and 200 clicks, then your click-through rate would be 2.2 percent. CTR is an important metric because it tells you how effective your ad is.

If, for instance, your click-through rate is lower than the average of 1.16 percent, then maybe you should be A/B testing different elements to see where and how the ad can be improved to increase performance.

Related Formula: Conversion Rate

Another formula you need to know that’s related to ROI is the conversion rate, which is the rate of leads who end up converting after clicking through. It’s important to remember that while conversions often refer to sales, the word can actually apply to any action that you’re trying to get a prospect to engage in.

(Number of Conversions / Number of Clicks) x 100

From the previous examples, you already know that your campaign generated 200 clicks and eight conversions, giving you a conversion rate of 4 percent, which would actually be high because the average conversion rate among marketers using AdWords is 2.7 percent.


What Is Inbound Marketing?


Inbound marketing is a way for companies to connect with and influence customers in a way that builds trust and fosters long-term relationships. It helps marketers create a customer experience that attracts prospects and increases visibility in a way that people don’t feel ‘sold’ to. 

A core element of inbound marketing is content. You may have heard the term ‘content is king’, but in the case of inbound, it really is. 

What this means is that quality trumps quantity and that’s what marketers should prioritize in their inbound marketing strategy. But there’s a lot more to inbound marketing than simply creating great content

Industries that are highly regulated, costly, or require information and guidance to help people through a process can benefit from inbound marketing. These industries include healthcare, financial services, manufacturing, recruitment, and education.  

In this blog, we look at what inbound marketing is, how it compares to outbound marketing, how to create an inbound marketing strategy, and examine great examples to give you an idea of what works. 


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