Understanding the calculations behind clicks is essential to optimize and maximize your digital advertising campaigns. Two calculations that are very important to monitor are CPC and CTR. CPC is used to find the cost for clicks and CTR is used to detect the engagement rate.
Calculating Cost Per Click
CPC stands for Cost Per Click and is an essential metric for marketers to understand when analyzing the performance and optimizing their digital advertising campaigns. Depending on the goals of your digital advertising campaigns the CPC can range anywhere from $.01– $4.00 on average. The formula to calculate the cost per click is the advertising cost divided by the number of clicks.
For Example: if a campaign cost an advertiser $100 and they received 32 clicks, the CPC would be $3.125 (100/32 = #.125).
Calculating Click Through Ratio
CTR stands for Click Through Rate and is a measure of how effective an ad is based upon how many people have clicked. Typically average to high click-through rates are usually around .50 but can go much higher if the ad placement and message is very relevant to the user.
For Example: if a campaign ran 50,000 impressions and generated 4765 clicks, the CTR would be .09.