Okay, welcome back. In this video, we're going to talk about how to measure the success of your campaigns where you're paying per impression. Okay? So typically, when we're talking about cost per impression we're calling we're talking about 1000 impressions. Okay? So in the abbreviation for this is CPM, okay?

In this the Roman numeral for 1000, which is where that comes from. So the first thing we want to look at is our click through rate. Okay? So this is just the amount of clicks divided by the amount of impressions that we get times 100. Okay, and that's going to give us our click through rate and a percentage. Okay, now, we don't really need the percentage for these calculations, but just to give you an idea, let's say let's say you get about 50 clicks and you get about 100,000 impressions.

Okay, that's going to equal point 0005. Okay, and if you multiply that by 100, you're going to get the actual percentage. So point 0005 times 100 equals about a point 05 percent click through rate, which is pretty normal. It's the average click through rate for people starting off and beginning with Facebook ads. So if you come down here, we'll see the next metric we want to look at is our cost per thousand. Okay, so our CPM.

So basically, the way we derive this number, is you just take your ad cost, you divide that by your total pageviews. And then you multiply that by 1000. Because that's what we're trying to figure out is our cost per 1000 views. Okay, so let's say we have an ad that cost us 40 bucks for the month and we had $100 And pageviews Okay, that's point 0004. All right, now we're gonna multiply that by 1000. So we get about four cents to about 40 cents per thousand views.

Okay? So if you don't already, Facebook should give you this number already, but I just wanted to show you how to calculate it, just in case Okay, you wanted to maybe try another aggregator, or if you're ever buying media on a different network or different platform, Facebook will give you just remember what the cost per thousand is, but you can figure it out this way as well. And this is going to come into handy because we want to figure out what's the most we can bid, which we're going to talk about here at the end of this video, while staying in profit, okay, not losing money. So the next thing we can figure out is our ad cost. It's basically an inverse of what we just did. Basically, if you want to figure out the ad cost, and you don't know that, but you do know the cost per thousand and the pageviews, you just take the page views and you multiply it by your cost per thousand, which in our case was 40 cents.

You have 40,000 and you're gonna subtract that number by 100 or by 1000. So we get an ad cost of 40 bucks. Okay, so basically the same thing up here. It's just an inverse of that formula. Pretty cool, pretty easy to do. If you if you know the cost per thousand, and you have an idea of how many total pageviews then you can figure out what the ad cost of the, but these are formulas I'm showing you how to calculate these two, but you're gonna learn this as you go.

Okay, so you will learn from your campaign how much your ad costs and total. That's why you can set your daily budget and set your lifetime budget so you don't go over that. But you'll know from experience exactly how much your ads costing you. So next thing we'll look at is our estimated clicks. Now these now we're going to get into estimating our profit so you can come from a place of strength know exactly, after a couple campaigns, you'll know you'll have these numbers and these numbers are very important, because they're going to give you a good idea of what you can do in your next campaign. Okay, so your estimated clicks is just going to be your click through rate, okay, which we already figured out.

Let's say our click through rate is point 05. In this case, point 0005. So that's point 05 percent times our total pageviews. Okay, so our total pageviews are 100,000. That's what we had for the previous month. NET comes out to 50.

Okay. All right. So that's 50 estimated clicks. If you come up here, we already figured out the click through rate. Okay, so you basically took 50 divided by the number of impressions times 100, to get the, to get the click through rate. So basically, this click through rate is going to hold steady for our ads.

And then this number may change the number number of impressions you got, but that's why this is an estimation. It's going to give you a good idea going forward of what you can do, like what you can expect from these campaigns. Okay, so the next one we want to figure out is your estimated revenue. Which is pretty easy. It's just our estimated clicks, multiplied by the EPC. So if our estimated clicks were 50 bucks or 50 clicks, we just multiply that by our EPC.

So our earnings per click is basically just how much we made per click on our last ad, and you'll be able to figure that out in your dashboard. But let's say we made a $4 EPC. On our last ads, that means that every click that came if we averaged it out, if we average the amount of money we made, then we made $4 per click Okay, so let's say it's $4 per click, that means on this campaign made about 200 bucks, okay, not bad. So what we want to do now is figure out how much that's actually profit. Okay, so if we come down here, we take that $200 we subtract out the cost of the ad, which was $40. And we get a profit of 160 bucks.

Cool. So we can use this to predict, we could use these numbers like EPC from our last campaign, or estimated clicks to predict how much we're actually going to make. Okay? Now, these are just predictions. Okay? This is what we think we could make.

It's an estimation, but it's going to help us decide this last part, which is our maximum CPM, which is how much we can bid and stay in profit. Okay, so when you're asked how much you want to bid, obviously, if you bid more than your competitors, you're going to end up you know, outranking them and getting better spots in Facebook, which is going to lead to more clicks and more sales. But you want to know how much you can actually do. So what we're going to do is take our estimated profit and we're going to multiply that by 1000. Because we're trying to figure out our CPM or maximum CPM and then we're going to multiply that black bar click through rate okay. Our click through rate is point 00000005.

Okay, then we're gonna multiply that by our conversion rate. So our conversion rate is on our last campaign, you know, what was the conversion rate? What was the number of sales divided by the number of clicks, this isn't $1 amount. We want to see how many people bought versus how many people clicked. So let's say out of our 50 clicks, we had one sale, okay. And, you know, obviously, we probably charged $200 for that one sale.

So that's where that number came from. But if you look here, let's say we took our, you know, one sale divided our by 50 clicks, we'd have 1.02 conversion rates, it's a 2% conversion rate. So, what we do now is just do the math here. And that's gonna come out to Sitting at 160 times 1000 times point 0005 times point 02. And that's going to come out to 1.6. Okay, so now we know that the most that we can bid to try to get a better ranking in the ad platform is right now currently with our current campaign, and our estimated profit, about $1 and 60 cents.

Okay, so these numbers are gonna be very helpful. When you're trying to figure out, you know, how much should I bid? You know, you know, where's where's the weakest link of my campaign? Is it my landing page? Is it my conversions? Could I up my conversion rate?

Could I, you know, up my clicks, you know, should I make my ad better. So there's, there's a lot of different factors that go into it. But knowing the numbers is really going to give you the strength of your business. So I recommend you take these numbers, you put them in a chart You monitor your progress, and you just try to increase your profit, increase the maximum CPN that you can bid and just keep going with it, you know, sky's the limit. But if you fail to track your business, he failed to do this part, then you may end up just having sporadic results and not really knowing, you know, what's working and what's not. So, so do the math, figure out exactly what you want your maximum CPM to be.

But just keep in mind when you're first starting out, you're not going to know this right away. Okay, you probably have to run through a couple campaigns and see how your ads are converting. Or see if people are clicking on them. See how your actual offers converting. And then you can go from there.