How this calculator works
An online campaign passes through a chain of stages. Impressions are times an ad was shown, and the click-through rate turns them into visits. A share of those visits asks for more information and becomes a lead, and a share of leads buys and becomes a customer. Multiplying the stages together shows how many people reach each point. The campaign cost divided by the number of visits, leads or customers gives the cost per result, while revenue divided by the same counts gives revenue per result. Return on investment compares the revenue from those customers with the campaign cost. Each rate applies to the stage before it, so a campaign with strong clicks but a weak lead form can still look healthy at the top and poor at the bottom.
Formula
Visits = impressions x click-through rate. Leads = visits x visit-to-lead rate. Customers = leads x lead-to-customer rate. Cost per thousand impressions = cost / impressions x 1,000. Cost per click = cost / visits. Cost per lead = cost / leads. Cost per customer = cost / customers. Revenue = customers x revenue per customer. ROI = (revenue - cost) / cost.
Worked example
100,000 impressions at a 2% click-through rate produce 2,000 visits. A 5% visit-to-lead rate gives 100 leads, and a 20% lead-to-customer rate gives 20 customers. Spending $2,000 costs $20 per thousand impressions, $1.00 per click, $20 per lead and $100 per customer. At $300 of revenue per customer the campaign earns $6,000, so ROI is ($6,000 - $2,000) / $2,000 = 200%. Revenue is $3.00 per click, $60 per lead and $300 per customer, or $200 per order at 1.5 orders per customer.
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Frequently asked questions
Is a click the same as a visit?
Not always. Duplicate clicks, bounced loads, bot filtering and redirects can make analytics sessions differ from ad clicks. Use the visit count reported by the analytics tool that also reports conversions, and treat the click-through rate as an estimate if the two systems disagree.
Why are some cost figures missing?
Cost per lead, cost per customer and the revenue ratios divide by the number of produced results. If a rate is zero no leads or customers exist, so those figures are undefined and are left out rather than shown as infinity.
Should I use revenue or gross profit?
Return on investment here compares revenue with campaign cost. If you want a break-even test, set the campaign cost to your own cost of goods plus ad spend, or compare the result with your gross margin.