How to use the ad cost calculator
- 1Choose "Work out my metrics" to analyse a campaign that has run, or "Plan a budget" to estimate results before you spend.
- 2For metrics, enter whichever of ad cost, impressions, clicks and conversions you have. Leave the rest blank.
- 3For planning, enter your budget, whether you pay per click or per 1,000 impressions, the expected rate, and your expected click-through and conversion rates.
- 4Read the results. Anything that cannot be worked out yet is listed with the inputs it needs.
The five core ad metrics
Every ad platform reports the same basic chain: the ad is shown (impressions), some people click (clicks), and some of those take the action you want (conversions). Dividing cost and counts along that chain gives five numbers you can compare across campaigns and platforms.
CPM is the price of reach, CPC the price of traffic and CPA the price of a result. CTR tells you how well the ad grabs attention, and conversion rate tells you how well your landing page or offer turns visitors into customers.
CPM = Cost ÷ Impressions × 1,000 CPC = Cost ÷ Clicks CTR = Clicks ÷ Impressions × 100 Conversion rate = Conversions ÷ Clicks × 100 CPA = Cost ÷ Conversions
How the metrics connect
The metrics are linked, so a change in one moves the others. CPC equals CPM divided by 1,000 times CTR: if your CPM stays at $8 and your CTR rises from 1% to 2%, your cost per click halves from $0.80 to $0.40. CPA equals CPC divided by conversion rate, so a better landing page lowers your cost per sale without touching the ads.
This is why a cheap CPM is not always a good deal. Low-cost impressions that nobody clicks can give a higher CPA than expensive impressions shown to the right people.
CPC = CPM ÷ (1,000 × CTR) CPA = CPC ÷ Conversion rate
Planning what a budget will buy
If you pay per click, divide the budget by the cost per click to get clicks, then multiply by your conversion rate to get conversions. If you pay per 1,000 impressions, divide the budget by the CPM and multiply by 1,000 to get impressions, then apply your click-through and conversion rates.
Use your own past results where you have them. Platform estimates and published benchmarks vary widely by country, industry, season and audience, so treat any plan as a starting point and check it against a small test before committing a large budget.
Pay per click: Clicks = Budget ÷ CPC Pay per 1,000 views: Impressions = Budget ÷ CPM × 1,000 Conversions = Clicks × Conversion rate
Worked example
A small business runs a search and social campaign for a month and pulls these totals from its ad account.
| Ad cost | $1,200.00 |
| Impressions | 150,000 |
| Clicks | 2,250 |
| Conversions | 90 |
| CPM | $8.00 |
| CPC | $0.53 |
| CTR | 1.5% |
| Conversion rate | 4% |
| Cost per conversion (CPA) | $13.33 |
Each sale cost $13.33 in ads. Planning the next month with a $1,000 budget at $0.80 per click, a 2% CTR and a 3% conversion rate gives about 1,250 clicks, 62,500 impressions and 37.5 conversions, a CPA of about $26.67.