The formula
CTR = clicks ÷ impressions × 100 · CPC = cost ÷ clicks · CPM = cost ÷ impressions × 1,000
What it means
An impression is one showing of the ad; a click, one visit. CTR measures how appealing the ad is and CPC what each visit costs. CPM is for comparing awareness campaigns, where the aim is not the click but being seen.
How to work it out by hand
- Divide the clicks by the impressions for the CTR
- Divide the cost by the clicks for the CPC
- Divide the cost by the impressions and multiply by a thousand for the CPM
- Divide the conversions by the clicks for the conversion rate
What is worth knowing
A CTR below 1 % on search usually means the ad does not match what people are looking for; on display, 0.5 % is already normal. And there is a common trap: a lower CPC is not always better. Cheap clicks tend to come from worse-qualified traffic, and what matters in the end is cost per conversion, not per click.