Calculating CPC, CPM, CTR and the rest

Hi all,

Before starting my first AdWords account, I want to make sure I understand a few things. I've been looking online for ways to calculate CTR and CPC on my own and keep finding different ways for something that should be simple?
Would love to get a real and reasonable explanation for that please.

Also, saw a question about CPM and CPC online which I thought I knew the answer to, but got the wrong answer from the "quiz". Here goes:
I have a CPM of 20$
CTR=2%

What is my CPC?

I'm sorry, it sounds silly, and it really is, but the answer is said to be something that doesn't make sense.

Please help?

 

CTR is Click (Through) Rate. That's the number of clicks divided by the number of times your ad was shown.

Adwords shows you the CTR so you don't have to calculate it yourself. It also shows you the CPC (Cost per Click). CPM (Cost per Mille, mille is latin for thousand) is available only for display network campaigns. But if you decide to use the CPM model, Adwords also shows you the CPC.

Anyway, easy to figure out. 2% means 20 clicks/1000. If you spent $20 for those 20 clicks, that's $1 per click. Simply divide your spend by the number of clicks. Doesn't matter the mode, CPC or CPM, that is being used.

 

Re the CPM calc that is. Thank you!

I guess dont trust everything you see online, huh.

 

What's a good average CPC?

Obviously the lower the amount paid the better, but what's a realistic expectation? (I imagine it'll differ per platform.)

 

That's an unanswerable question. If I was selling homes, I might not blink an eye to pay $25 per click and it might be realistic in that industry (I don't know, just showing as an example).

 

So it's mainly dependant on how much you're willing to pay, or how valuable you see your ads as?

 

I have been doing keyword research at CPC $5 minimum, what does this means?

 

Impression influenced by advertising and keyword bid price. Click ads(CPC) influenced by advertising the position (Avg.Pos) and copywriting. Sales occurs (CTR) is influenced by the type of visitors (targeted) generated by click on ads and optimizing landing page (including the quality of product, price, payment methods, incentives, etc.). Visitors who targeted (targeted traffic) is determined by the selection of keywords and segmentation, target advertising.

I hope it help

 

Just divide it by 1000 your CTR and you find what are the aharges per click you are getting for your adds.

 

Check out Google's learning centre. They explain everything.