Need help calculating MAX CPC

Discussion in 'Pay Per Click Advertising' started by jenniferstone, Jul 27, 2012.

  1. #1
    Hi everyone I really need help on figuring out MAX CPC. Did research online but everyone seems to have their own formula which makes this all confusing. I have provided the following stat below from my recent AdWords for your reference. Thank you very much!

    -Gross sales = $91.73
    -Total clicks = 49
    -Total advertising cost = $26.05
    -Conversion = 30.6% -> 49 clicks divided by 15 sales
     
    jenniferstone, Jul 27, 2012 IP
  2. atxsurf

    atxsurf Peon

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    #2
    need your profit margin to calculate anything, gross sales is irrelevant (unless by that you meant affiliate commission)
     
    atxsurf, Jul 28, 2012 IP
  3. jenniferstone

    jenniferstone Peon

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    #3
    Yes this is affiliate commission. So earnings would be calculated as gross commission or as net commission (minus advertising cost)?
     
    jenniferstone, Jul 28, 2012 IP
  4. atxsurf

    atxsurf Peon

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    #4
    your max CPC (at which you would only break even): 91.73/49=$1.87 per click
     
    atxsurf, Jul 28, 2012 IP
  5. jenniferstone

    jenniferstone Peon

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    #5
    Interesting. I thought Max CPC was calculated as:

    MAX CPC = Average Payout * Conversion %

    No?

    Isn't your formula equal to earnings per click and not MAX CPC?
     
    jenniferstone, Jul 28, 2012 IP
  6. atxsurf

    atxsurf Peon

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    #6
    it should give you the same result, just more calculations:
    91.73/15*0.306=$1.87
     
    atxsurf, Jul 28, 2012 IP
  7. jenniferstone

    jenniferstone Peon

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    #7
    Ok got it. Would it make more sense to subtract 91.73-26.05 and then divide by 15? Or it's better to get the gross amount versus the net amount? Thanks!
     
    jenniferstone, Jul 28, 2012 IP
  8. atxsurf

    atxsurf Peon

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    #8
    that would give you "by how much can I increase my current CPC" value
     
    atxsurf, Jul 28, 2012 IP
  9. mizugaki_showa

    mizugaki_showa Peon

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    #9
    [100%-(desired ROI in percentage)]*[gross sale/(# of clicks*cost per click)]

    try that..
     
    mizugaki_showa, Jul 28, 2012 IP