How to Use the CPC ROI Calculator
Keeping track of your return on investment (ROI) from cost per click (CPC) advertising can be time-consuming but important in order to keep costs from running away. It is also necessary in order to determine future bid prices to maintain needed profit margin.
The free ROI Calculator tool from Developer Shed Network can help you keep track of your ROI and project future ROI easily and quickly. It calculates your monthly cost, number of conversions, projected profit and ROI by looking at the following factors:
Total Clicks
This is the total monthly clicks that you can find in your publishers activity report. Use your last month’s number to calculate your ROI for the last month or use an average number of clicks over several months to predict next month’s ROI.
CPC
This is the cost paid for each click on your ads. You can find this number in your publishers activity report as well. Use last month’s CPC to determine your ROI for the last month, or enter different amounts to predict or project future ROI or help determine future bid prices.
Conversion Rate
This number is the percentage of the visitors who bought a product or filled out a form, i.e. “converted” by taking the action you wanted them to, divided by the total number of visitors who clicked on the ad and visited the site. You can get this number from your own website records or from the affiliate program you subscribe to.
Profit
The average profit per conversion refers to the money you earned from a sale. It may be a flat rate, such as $45 per sale if you’re an affiliate, or if you’re selling your own product, it is the total sale price, less your cost. If it varies, enter the average of your profits but dividing the total profits by the number of sales.
As an example, we can enter 3000 total clicks at a CPC of $.24 each. At a 2% conversion rate with an average of $45 profit, we can instantly see a monthy cost of $720 for 60 conversions, with a total profit of $1980 for a ROI of 275%. This points to a very successful campaign with exact figures that you can base future campaign projections on. This tool simplifies the process to help you keep track and make projections.
