Key Performance Indicators

A Key Performance Indicator helps to understand how the operation is performing. It acts as a compass, helping us understand whether we are taking the right path toward our strategic goals.

To be effective, a performance indicator must be well-defined and quantifiable and applicable to our operation. We use a suite of media metrics to benchmark our projects right from the beginning.

CPM โ€“ Cost per thousand impressions

  • The CPM stands for cost per thousand impressions is the rate to be charged or paid for every 1,000 times an advertisement is displayed

CTR โ€“ Click Through Rate

  • The page click-through rate (CTR) is the number of ad clicks divided by the number of page views.

CPC โ€“ Cost per Click

  • The cost-per-click (CPC) is the amount you earn each time a user clicks on your ad

Formula โ€“ CPM
The formula for calculating CPM based on CTR and CPC is:

  • CPM = 1000 ร— CTR ร— CPC

Formula โ€“ CPC
The formula for calculating CPC based on CTR and CPM is:

  • CPC = CPM / (1000 ร— CTR)

Formula โ€“ CTR
The formula for calculating CTR based on CPM and CPC is:

  • CTR = CPM / (1000 ร— CPC)

Customer Acquisition Cost

  • All Sales and Marketing costs (advertising, salary, commission, bonus, overhead and other) in a period divided by the number of new customers in that period

Marketing % of Customer Acquisition Cost

  • Take all the Marketing cost, and divide by the total Sales and Marketing costs you used to compute CAC

The ratio of Customer Lifetime Value to CAC

  • To compute LTV. take the annual payments from a customer. adjust for your gross margin. and divide by the annual cancellation rate or churn. Then divide LTV by CAC for the ratio

Time to Payback CAC

  • Take the CAC and divide by how much your customers pay you on average each month

Marketing Originated Customer %

  • Take all new customers you signed up in a period, and look at what % of them started with a lead that Marketing generated

Marketing Influenced Customer %

  • Take all new customers you signed up in a period. and look at what % of them had any interaction with a Marketing activity
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