What does an advertisement cost?

Calculation of Advertising Costs

Here are some basic formulas for calculating advertising expenses:

Cost Per Click (CPC):CPC = Total advertising costs / Number of clicks

If you spend $5000 and receive 200 clicks, the CPC would be:CPC = $5000 / 200 = $25 per click

Cost Per Acquisition (CPA):CPA = Total advertising costs / Number of conversions

If you spend $5000 and get 50 conversions, the CPA would be:CPA = $5000 / 50 = $100 per conversion

Return on Ad Spend (ROAS):ROAS = Revenue from advertising / Total advertising costs

If you earn $20,000 from a campaign where you spent $5000, the ROAS would be:

ROAS = $20,000 / $5000 = 4

This means that for every dollar you spend on advertising, you get 4 dollars back.