This post is to share a formula I have found extremely handy when setting up a new PPC account, or simply adding new keywords to my existing PPC account.

• Max. CPC, Volume, Avg. CPC, Pos High, Pos Low, Clicks, & Cost are all estimates from Google’s Traffic Estimator Tool.
• Conv% is the rate at which an account converts. If there is historical data, it is best to use that, if not, you can enter any conversion rate and see what Max. CPC would suit your business goals and objectives best.
• Revenue Per Conversion is the amount you would earn per conversion
• Target CPA is the maximum you are willing to pay per conversion. Keep in mind, this amount should ideally be less than your Revenue Per Conversion, unless you are trying to breakeven.
• The last row, is a subtotal of all the rows. Important thing to note, even though the individual Max. CPC for both the keywords is different based on their individual traffic volume and performance, $2 Max. CPC at the very end is an important figure directionally. Since it is based on subtotals, it shows what your account’s overall Avg. CPC should be.

Note: All figures in blue are values that can be entered manually, all figures in white are calculations.

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