Marketing Strategy2 min read
Digital Marketing Formulas: ROI, ROAS, CPC, CTR and More
A quick reference of the most common digital marketing formulas and metrics, grouped by area, from ROI and ROAS to CLV.
Sagar MamureMechanical engineer turned marketer · Founder, Marketing Mantra
Several formulas and metrics in digital marketing help you track performance, optimise strategy and measure return on investment. Here are the most common ones, grouped by area, so you can bookmark this page as a quick reference.
For manufacturers, these numbers are a means to an end. The measures that matter most are qualified enquiries, quotations and orders.
General performance metrics
These tell you whether your spend is paying back.
| Metric | Formula |
|---|---|
| ROI (return on investment) | (Net profit ÷ Total investment) × 100 |
| ROAS (return on ad spend) | Revenue from ads ÷ Cost of ads |
| CPA (cost per acquisition) | Total campaign cost ÷ Number of conversions |
| CPC (cost per click) | Total ad spend ÷ Number of clicks |
| CPM (cost per thousand impressions) | (Total ad spend ÷ Total impressions) × 1,000 |
Website and SEO metrics
These tell you whether visitors find what they need and act on it.
| Metric | Formula |
|---|---|
| CTR (click-through rate) | (Clicks ÷ Impressions) × 100 |
| Bounce rate | (Single-page visits ÷ Total visits) × 100 |
| Conversion rate | (Conversions ÷ Total visits) × 100 |
Email marketing metrics
These tell you whether your emails are opened, read and wanted.
| Metric | Formula |
|---|---|
| Open rate | [Emails opened ÷ (Emails sent − Bounces)] × 100 |
| Click-to-open rate (CTOR) | (Clicks ÷ Opens) × 100 |
| Unsubscribe rate | (Unsubscribes ÷ Emails sent) × 100 |
Social media metrics
These tell you whether your audience is growing and engaging.
| Metric | Formula |
|---|---|
| Engagement rate (per post) | [(Likes + Comments + Shares) ÷ Total followers] × 100 |
| Follower growth rate | (New followers ÷ Total followers) × 100 |
E-commerce metrics
These tell you how much each customer and order is worth.
| Metric | Formula |
|---|---|
| Customer lifetime value (CLV or LTV) | Average purchase value × Purchase frequency × Customer lifespan |
| Cart abandonment rate | [(Carts created − Completed sales) ÷ Carts created] × 100 |
| Average order value (AOV) | Total revenue ÷ Number of orders |
Pick the few metrics that connect to revenue, track them every month, and improve one at a time.
Key takeaways
- ROI, ROAS, CPA and CPC show whether spend is paying back.
- CTR, bounce rate and conversion rate show how well your website works.
- Open, click-to-open and unsubscribe rates measure email health.
- CLV, AOV and cart abandonment measure customer and order value.
Sagar Mamure is the Founder and CEO of Marketing Mantra, a Pune-based marketing, sales and branding consultancy for manufacturing SMEs. A mechanical engineer turned marketer, he helps factories turn their websites and LinkedIn into steady sources of RFQs. Connect on LinkedIn.
Originally published in the Marketing Mantra newsletter on LinkedIn.
