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By Michail Dimitriou*
Calculate the performance of an AdWords account with the following formulas. All data must be calculated for the same period.
Definition:The conversion rate is the proportion of visitors who buy a product or a service (for e-commerce website) or who subscribe for something, or in general have completed a goal, successfully.
Formula:Conversion Rate (CR) % = Conversions * 100⁄Visits
Average revenue per order
Formula:Average revenue per order = Revenue⁄conversions
Cost Per Action - CPA
Definition:Cost per Action (CPA) is the amount that the advertiser pays for each specified action (for example an order for e-commerce website)
Formula:Cost Per Action (CPA) = Spending⁄Conversions
Value Per Conversion
Formula:Value Per Conversion = Average revenue per order⁄Cost Per Action
Value Per Click - VPC
Definition:Value per click (VPC) is the expected profit from a current visitor to your website.
Formula:Value Per Click (VPC) = Value Per Conversion * Conversions⁄visits
Tip: Value per Click and Cost per Click rate must be VPC > CPC
Formula:Profit = Revenue - ( Cost Per Action * Conversions )
Return On Investment - ROI
Definition:Return on Investment (ROI) measures the ratio of your profits to your Google AdWords costs.
Formula:Return On Investment (ROI) % = Profit * 100⁄Spending
Google AdWords performance calculatorHere is an excel file that calculates the performance of your Google AdWords account.
*Michail Dimitriou is Adwords Qualified Individual and is working as digital marketing manager for a private sector company in Thessaloniki, Greece. Also he supports several digital agencies in USA, India and Greece.
20 June 2015