Term  Formula  Details  Example 
CTR  Clickthrough Rate  (Number of clicks / Number of views) X 100  CTR is used to calculate campaign overall performance.  In a campaign, if your ad was shown 3000 times to audience and it received 75 clicks to the landing page. The CTR is (75 / 3000) X 100 = 2.5%. The higher the CTR, the more successful the campaign can be considered as. 
CPM  Cost per Mille  CPM = (Cost to an Advertiser / Impression) X 1000  CPM model of online advertising is used for brand awareness and exposure for a newly established brand.  Suppose, an ad received 5500 impressions. The advertiser decided to spend GBP 25.00 for the campaign. The cost for a thousand impressions would be (25 / 5500) X 1000 = GBP 4.5 which means that the advertiser agreed to pay US$ 4.5 for every thousand views. 
CPC  Cost per Click  CPC = Cost to and Advertiser / Number of clicks  CPC is widely used model; the advertiser needs to pay for each click instead of impression.  Suppose, you’re running an ad campaign for one of the eBooks that you sell online. You chose the CPC model. How much would you have to disburse for the campaign? Consider the number of clicks and the amount you’d like to spend on each click. If the number of clicks you received is 150 and the CPC is GBP 2.2, the total cost to you is GBP 275.00 That’s how it works. 
CR  Conversion Rate  CR = (Number of Conversion / Number of Clicks) X 100  If your online marketing campaign’s goal is only to generate revenue.  Let’s assume that ABC company sells shoes through an electronic shop. It ran an ad campaign on Facebook and an ad received 250 clicks. The advertising was happy seeing the CTR. But much to his surprise, the number of conversions on the website was only 1 meaning that only 1 product was sold during the time the ad was live. The conversion rate is (10 / 250) X 100 = 4% which seems to be pretty low. 
CPA  Cost Per Action/Acquisition  CPA = Cost to an Advertiser / Number of Conversion CPA = Cost to an Advertiser / (Number of impression X CTR X CR)  In the case of CPA, an advertiser will only pay when a conversion takes place regardless of the number of impressions an ad receives or the number of clicks it generates. For a revenuegenerating business, CPA is of much importance.  Suppose XYZ Inc. sells laptops through its website. It ran an online ad campaign where one ad promoting a newly arrived model of laptop was viewed 3000 times by the target Audience. The number of clicks it received, however, was 150 and there were 15 conversions. 
CPL  Cost Per Lead  CPL = Cost to the Advertiser / Number of Leads generated from the ad eCPM – Effective Cost Per Mille  When the marketers’ campaign goal is to generate leads. This is similar to CPA, except the campaign goal. 

eCPM  Effective Cost Per Mille  eCPM = ( Total Earning / Total number of Impression ) X 1000  Determines the revenue generated from a thousand impression of a specific ad, unlike the actual CPM which determines the cost to the advertiser for a thousand impression of the same ad.  Suppose a company generated US$ 50 in revenue from an ad and the total number of impression the ad received was 10000. The eCPM is (50/10000)X1000 = US$ 5 which means that for every thousand impressions, the company earned US$ 5 in revenue. 
eCPC – Effective Cost Per Click  eCPC = Total Earning / Total number of Clicks 


eCPA – Effective Cost Per Action  eCPA = Total Earning / Total number of actions  Determine the total revenue generated by an ad for each action taken on the website. It’s used to calculate how effective a CPA campaign is. 

ROI – Return on Investment  ROI = (Total Revenue – Total Cost) / Total Cost  It is important to know the monetary benefit (in our case, the revenue) earned against the money invested to acquire it.  Suppose an eCommerce store has generated US$ 2000 from an online advertising campaign and disbursed US$ 500 on the campaign. The return on investment is (2000500)/500 = US$ 3 which is 300% of the cost when converted into a percentage. 300% return on investment is pretty high but it is also true that achieving a high ROI is not easy. We can state that for every dollar spent on the campaign, the business generated US$ 3. 
LTV  Life Time Value (Added by Domingo Cordero)  Cost per Click / Conversion Rate < Life Time Value  Estimated total revenue a customer generates throughout their relationship with a business. LTV is an estimate and can vary based on customer segments, pricing models, and industry factors.  For example, if the LTV (Life Time Value) for ABC company is $500 and a CR (Conversion Rate) = 2%. We should not expense more than $10 CPC (Cost per Click) $10 / 2% =$500 
Ad Rank  CPC Bid * Quality Score  Ad Rank is a metric used in online advertising, particularly in platforms like Google Ads, to determine the position of your ad on a search engine results page (SERP) and whether it will be displayed at all.  This helps in determining how prominently your ads are displayed in a SERP 
ROAS – Return on Ad Spend  Return on Ad Spend = (Revenue/Spend) OR, (Revenue + Goal Value) / Cost  A key metric in marketing, especially online advertising, measuring the revenue generated per dollar spent on advertising. Helps assess the efficiency and profitability of your advertising campaigns.  If I spent $10,000 on paid search in October and generated $50,000 in revenue, the ROAS for paid search is $4:1. ($50,000/$10,000= $5) 
Average Cost of Sale
 ACOS = Total Cost/ Total Revenue
 ACoS (Advertising Cost of Sale) typically represents the percentage of your sales revenue that was spent on advertising.
 Advertising Cost of Sale (ACoS) for your ad campaign is 6.3%. This is calculated by dividing the total ad spend (Rs. 5,500) by the total revenue generated (Rs. 87,000) and multiplying by 100. It indicates that for every Rs. 100 earned through the campaign, Rs. 6.3 was spent on advertising.

Impressions to Conversion (I2C) Percentage
 I2C Percentage = Conversions / Impressions x 100
 The Impressions to Conversion (I2C) percentage, also known as Impression Conversion Rate (Imp Cvr), measures the rate at which ad impressions lead to conversions. It reflects the effectiveness of your advertising campaign in turning views into desired actions.
 For instance if your total conversions are 1,5000 while total impressions were 252643, then you conversion can be calculated by = 150000 / 252643 = 0.60 x 100 = 60%

Average order value (AOV)
 AOV= Total Revenue / Total Conversions
 A key metric in ecommerce that measures the average dollar amount spent per order. Helps understand customer purchasing habits and analyze overall business performance.
 Total Revenue = AOV x Total Conversions Total Conversions = Total Revenue / AOV For instance, if your total revenue was Rs. 75000 while your conversions were 15, then your AOV can be calculated by = 75000/15 = 5000

Impression Share
 Impression Share = Impressions / Total Eligble Impressions
 Impression Share is a metric used in online advertising, particularly platforms like Google Ads, to measure the percentage of times your ad appeared compared to the total number of times it could have appeared for relevant searches. It essentially indicates how visible your ad is for its target audience.
 Impressions = Impression Share x Total Eligible Impressions Total Eligible Impressions = Impressions / Impression Share Now, for instance if your total impressions that occurred are 101692, while the total eligible impressions were 252643, then your impression share can be calculated by – = 101692 / 252643 = 0.40 Hence, your Impression Share comes out to be 0.40.

Effective Cost per Mille (eCPM)
 eCPM = (Total Revenue / Total Impressions) x 1000
 eCPM, short for "effective cost per mille," is a metric used in online advertising to measure the revenue generated per 1,000 ad impressions, regardless of the actual pricing model (CPM, CPC, CPA). It helps publishers understand the overall profitability of their advertising inventory and advertisers evaluate the efficiency of their ad spend.
 Total Revenue = eCPM x Total Impressions Total Impressions = Total Revenue / eCPM Now, for instance if the total revenue that you generated through your ad was Rs. 110000, and you received a total impressions of 1,83,668. Then your eCPM can be calculate as = 110000 / 183668 = Rs. 0.59 So, your eCPM will be Rs. 0.59

Average Cost of Sale
 ACOS = Total Cost/ Total Revenue
 ROAS focuses on overall profitability: It helps you understand how much revenue your ads are generating for every dollar invested. ACoS emphasizes cost efficiency: It shows how much you're paying to acquire each customer through advertising. Ultimately, the optimal values for ROAS and ACoS depend on your specific business goals and profit margins.
 If the total revenue that you earned through an ad campaign is Rs. 87,000, while the total cost that you incurred in running that campaign is Rs. 5500. Then your Average Cost of Sales can be calculated by = 5500/87000 = 0.063 Hence, for every Rupee you earn, you spend Rs. 0.063, that’s your Average Cost of Sales.

Impressions to Conversion (I2C) Percentage
 I2C Percentage = Conversions / Impressions x 100
 I2C percentage measures the rate at which ad impressions lead to conversions.
 For instance if your total conversions are 1,5000 while total impressions were 252643, then you conversion can be calculated by = 150000 / 252643 = 0.60 x 100 = 60% Hence, your impression to conversion percentage is 60%
