How to Calculate CPI (Episode #5) – AIMCLEAR‘s Deep in the Sheets

Posted in Analytics & Reporting, Paid Search

Posted on November 5th, 2014

In this episode of Deep in the Sheets we examine how to effectively calculate ad creative performance using conversions per 1000 impressions (CPI).

CPI gives you the ability to take into account multiple performance metrics, in this case click-through rate and conversion rate to understand how one ad creative stacks up against another.
The formula is simple: CPI = CTR * Conv.Rate * 1000
If you are doing isolated ad testing where there are few variables across creatives, CPI allows you to isolate winners quickly.
Read on for the full transcript:
Hey everybody! Manny Rivas here and on this episode of Deep in the Sheets, we’re going to be talking about how to assess the success of an ad test, using conversions per thousand impressions. [MUSIC PLAYS] So on the screen I have an ad report that I’ve output from AdWords, and typically what I like to do is save my columns so that whenever I do this ad analysis I have just the metrics that I’m looking for. Makes your life a whole lot easier. So I’ve calculated my CTR and conversion rate in my pivot table. And that really one of the reasons why I enjoy CPI and optimizing towards CPI, because it takes into account CTR and it takes into account conversion rate. If you were to isolate any one of those metrics, say in my data here, “Ad Test 4” and “Ad Test 3” would win, if I was basing this solely on CTR—click-through rate. So, if we factor in conversion rate we can clearly see that the winners are “Ad Test 1” and “Ad Test 2.” So, the formula is super simple—the formula is your CTR multiplied by conversion rate, multiplied by 1000. And that is how to successfully measure an ad test using conversions per thousand impressions.

 

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