In his last post, Calculating Success – Figuring out ROI’s – Part 1 we covered a couple of things.
- Established a click cost as our basis for figuring out profitability
- Discussed the formula involved in calculating a EPC.
Now that we have an EPC we’re going to move on to figuring out how to get a CPC from a CPM cost. We know that CPM is the cost per 1000 people that see your ad. Typical CPM rates can range from 10 cents to 10-20$ CPM. Just depends on the site and how they value their traffic.
In order to do this we need to get things in terms of clicks. To get things in terms of clicks we need to add another metric and that’s CTR. As discussed in the previous post CTR stands for Click Thru Rate. This is the % of people that click on an ad. Pretty simple right? I get asked a lot what a good CTR is. Of course there is about 100 factors that go into making that determination like placement on the page, how focused the site is to the ad, etc etc. If I’m just doing a Run of Network buy I typically like to get a .1-.2% at a minimum.