Online Marketing Conversion Calculator
This online marketing conversion calculator is a tool that lets you analyze the whole process of internet marketing and sales, from ad views to actual sales and return on investment. You can use it to simulate your marketing funnel and decide whether the online business you just set up will be profitable. This article is also an online marketing step-by-step guide, explaining what all of the perplexing acronyms mean.
Marketing funnel
Even if you create the best ad on the whole Internet, most people will never even take a second look at it but frantically search for an "X" in the corner. Or they may never see it at all with the advent of adblockers. Only some will click on the ad, but that doesn't mean you have them in your pocket! Most of them will leave your website and never come back. Some will become potential customers interested in your product. That's not the end of the funnel, though — not all of them will decide to purchase your product and become actual customers.
Our calculator lets you determine the amount of people at each stage of the funnel. You need to make a few assumptions for it to work, though:
- Impressions: number of views of your ad. Every time a website with your ad is loaded, you get one impression.
- CTR (click-through-rate): percentage of impressions that lead to a click. For example, if your CTR is 5%, then that means that 1 of every 20 people who see this ad is intrigued enough to click on it and visit your website. Please check out our CTR calculator to understand more.
- Visits: actual number of visits on your website (generated by impressions). This number will be calculated automatically.
- Visits to leads: percentage of visits that result in leads (potential sales contracts). For instance, visits to leads ratio of 10% means that every tenth person who visits your website is interested in your product.
- Leads: absolute number of leads. This number will be calculated automatically.
- Leads to customers: percentage of leads that result in someone purchasing your product, that is, the lead has become a customer.
- Customers: the very bottom of the marketing funnel — the number of people who were so interested in your product that they decided to buy it. This number will be calculated automatically.
Costs of internet marketing
Advertising online doesn't come free. You probably pay a lot for your ads on multiple websites at once. If you want to succeed, it is critical to control your overall cost of client acquisition, among others SaaS software as a service business metric. You can also check out our SaaS metrics calculator. Hence, our calculator lets you determine how much you are paying at each stage of your marketing — per click or per customer.
- Cost: total cost of your online marketing. You can use the website ad revenue calculator to calculate this if it depends on the number of pageviews.
- CPM: cost per thousand impressions. For more details on this statistic, take a look at the CPM calculator.
- CPC: cost per click or per visit.
- Cost per lead: this one is self-explanatory — the investment you make to get one lead.
- Cost per customer: as you could expect, it is the total cost of advertisement required to get one customer.
Return on investment (ROI)
Was setting up the ads worth it in the first place? The third section of the online marketing conversion calculator helps you decide on that. Simply type in the total revenue you made on your products, and this calculator will help you calculate all of the statistics.
- Revenue: money you made on your online sales. It is not equal to the income (net profit) - you don't have to subtract the costs of setting up the ad.
- ROI: return on investment, a percentage value that tells you how profitable your business is. The higher the ROI, the better. If it's a negative value... Well, it seems like you need to rethink your business, as you are currently losing money!
- Revenue per click / per lead / per customer: these values are self-explanatory. They are a good measure of how profitable this business is compared to others.
You can open the lifetime value (LTV) section at the end of our tool to calculate your prospective revenue based on the assumption that each customer makes more than one sales contract.
- Number of orders per customer: this is the total number of orders that one customer makes for the whole time they are one of your customers.
- Customer LTV: Lifetime value of a customer — how much they spend in your shop in total. It is simply the revenue per customer multiplied by the number of orders.
- Total revenue: total gain assuming that each of your customers will return to your shop multiple times to make the total number of orders as specified above.
What is ROI in digital marketing?
ROI stands for return on investment. ROI is a metric businesses use to assess the profitability of a sales campaign or investment by taking the ratio of the net profit generated by the business and the costs of running it and expressing the result as a percentage.
What is a good ROI for digital ads?
A ratio of 5:1. A good return on investment for digital ads is about $5 earned for every $1 spent. A 10:1 ratio is considered exceptional. Although this is almost a standard, you should consider the whole picture to determine if your current ROI suits your business.
How do I calculate ROI for digital marketing?
To calculate the return on investment for digital campaigns, follow these simple steps:
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Write down the total cost of running the campaign.
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Write down the net profit from your sales related to the campaign.
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Divide the net profit by the costs and multiply by 100 to get the ROI:
ROI = (net profit / costs) × 100
What does CTR mean?
CTR in digital marketing stands for click-through rate. CTR expresses the ratio of users who clicked on an ad and the total number of users who have seen the ad. It is one of the key concepts for running marketing campaigns.