Online advertising pricing models include cost per mille (CPM), cost per click (CPC), and cost per acquisition (CPA). Key metrics for measuring the success of online advertising campaigns include click-through rate (CTR) and conversion rates. There are several methods for calculating important metrics like impressions, clicks, leads, and costs based on available data points for pricing models. Understanding these various online advertising pricing models and metrics is important for evaluating the performance and ROI of paid online advertising campaigns.

1. Online Advertising
Pricing Models
• CPM (Cost per thousand impressions)
• CPC (Cost per click)
• CPA (Cost per acquisition)
• Conversion rates:
– Click-through-rate (CTR), conversion from clicks to
acquisitions, …
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2. 2
Rate that is paid per click
for a Pay Per Click
Advertiser. The amount
charged to the advertiser
every time a user clicks
on a keyword
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3. 3
Cost Per Thousand
Impressions - The cost
paid each time an online
advertisement such as a
company’s banner,
button or text link loads
on a user’s screen. Each
time the ad is displayed,
the ad server counts it
as one impression.
Some programs though
are configured to
exclude reloads or
internal user actions
from their count, so they
can get a more accurate
measure of web traffic
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4. .
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Click Through Rate - The number of times people clicked
on the links in your message. This is often referred to as
CTR (Click Through Rate). Note: you must have enabled
click through tracking in the campaign in order for this to
be recorded
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5. .
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ROI - Refers to the percentage yield provided for a given
investment. This term is used for evaluating SEM and
other forms of advertising by dividing the profit derived
from advertising by the cost of that advertising.
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6. • PPC Stands for Pay per Clicks.
• It’s important to know how we spend money online in PPC and how
to measure the success or failure of our Paid Campaign.
• There are lot many tricks, methods to measure success of PPC that
depends on your requirements
• It differs from person to person and campaigns to campaigns.
Pay Per Click
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7. • So how do you retrieve the missing data based on given fields, let’s understand each missing
column one by one with example.
• How to find Impression (Searches)
• Find Impression data based on clicks and CTR data
Formula to find impression = Clicks / CTR *100
= 13 / 0.65% *100
= 2000
Pricing Model
Impressions: 50000 Impressions: Missing
Clicks: 743 No of Clicks: 13
CTR: 1.49% CTR: 0.65%
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8. • How to find Clicks
• Find clicks data based on Impression and CTR
Formula to find Clicks = (Impression * CTR) / 100
= 30000 / 1.15%
= 345
Pricing Model
Impressions: 50000 Impressions: 30000
Clicks: 743 No Of Clicks: NA
CTR: 1.49% CTR: 1.15%
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9. • How to find leads ( No Of Leads -conversion)
• Find leads based on leads rate and clicks
Formula to find Leads = (Leads rate * clicks) / 100
= (24.56% * 281) /100
= 69
Pricing Model
Lead Rate: 5.92% Lead Rate: 24.56%
Clicks: 743 Clicks: 281
Leads: 44 Leads: NA
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10. • How to find CTR
• Find CTR based on Impression and clicks
Formula to find CTR = (Clicks / Impression) * 100
= (281/ 15000) *100
= 1.87%
Pricing Model
Impressions: 50000 Impressions: 15000
Clicks: 743 Clicks: 281
CTR: 1.49% CTR: NA
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11. • How to find Lead Rate
• Find lead rate based on clicks and leads detail
Formula to find Lead Rate = (leads / clicks) *100
= (2 / 13) * 100
= 15.38%
Pricing Model
Leads: 44 Leads: 2
Clicks: 743 Clicks: 13
Lead Rate: 5.92% Lead Rate: NA
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12. • How to find CPA
• Find lead rate based on clicks and leads detail
Formula to find Lead Rate = (leads / clicks) *100
= (2 / 13) * 100
= 15.38%
Pay Per Click Basic Formula
Leads Converted: 12 Leads Converted: 2
Clicks: 743 Clicks: 13
CPA Rate: 1 % CPA Rate: NA
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13. • How to find Average cost per click
• Find average cost per click based on Total cost and clicks
Formula to find Average Cost per Click = (Total Cost / Clicks)
= (25000 / 345)
= 72 INR
Pay Per Click Basic Formula
Total Cost: 15000 Total Cost: 25000
Clicks: 743 Clicks: 345
Average Cost per Click: 20 INR Average Cost per Click: NA
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14. • How to find Total cost
• Find total cost based on clicks and average cost per click
Formula to find total Cost = Clicks * Average cost per click
= (13 * 75)
= 975 INR
Total Cost: 5000 Total Cost: NA
Clicks: 200 Clicks: 13
Average Cost per Click: 25 Average Cost per Click: 75 INR
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15. • How to find Total Revenue
• Find total revenue based on revenue per leads and clicks
Formula to find Total Revenue = Revenue per lead * leads
= (550 * 2)
= 1100 INR
Pricing Model
Total Revenue: 88000 Total Revenue: NA
Leads: 44 Leads: 2
Revenue per lead: 200 Revenue per lead: 550 INR
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16. • How to find ROI
• Find total revenue based on revenue per leads and clicks
Formula to find Total Revenue = Total Cost + ROI
= (100000 + 20000)
= 120000 INR
Pricing Model
Total Revenue: 88000 Total Revenue: NA
Total Cost : 30000 Total Cost : 100000
ROI : 58000 ROI : 20000
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Thank You
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