Goal of an Ad
Every advertisement has a goal and this goal is tracked by way of a successful conversion.
Cost Per Acquistion (CPA)
The business must find out the exact cost per acquisition which is calculated as follows:-
Selling Price – Cost Price = Revenue (Total profit per successful conversion)
Conversion Rate
The rate at which successful conversion happens. It is calculated as follows:-
Conversions/Clicks = Conversion Rate
Value of a Click
Ater you have determined the CPA and the Conversion rate, the next step is to determine the value of a click. It helps you to analyze the maximum amount you are willing to spend on every click (CPC). If the value of a click comes out to be $10 then you must bid at a rate of less than or equal to $10 per click.
CPA * Conversion rate = Value of a Click
Incremental Cost Per Click (ICC)
Incremental Cost Per Click = Cost of Incremental Clicks (CIC) / Number of Incremental Click (NIC)
Where:- CIC = difference in the amount of cost by changing the bidding
NIC = difference in the amount of clicks by changing the bidding
 |
| When to change the bid based on the value of a click (Image credit:- thesearchagents) |
Rest you can learn by watching the video below:-
Also See:-
Steps to Optimize Your PPC Campaigns
Why Seo is Still Favored by Organizations
Adwords Quality Score
Basics of Google Adwords
Seo Vs PPC Comparison
Determine a Keywords Overall Worth
How to Calculate CTR
