An E-Commerce Paid Ads Campaign Calculator is a tool used to calculate the cost and resources needed to reach a desired sales target from an advertising campaign. It is typically used by e-commerce businesses that are running paid ads campaigns.
The calculator calculates the total customers needed to reach the target, the total website visitors needed to reach the target, the total ad impressions needed to reach the target, the total ad cost, and the cost-per-conversion.
For example, if an e-commerce business is running a paid ads campaign and wants to reach a sales target of $5,000, they may enter the following into the calculator:
A product price/average basket size of $50
A conversion rate from visitor to purchase of 2%
A click-through-rate from ad to visitor of 1%
A cost per 1k impressions of $20.
The calculator will then output the following: total customers needed to reach the target of 100, total website visitors needed to reach the target of 5,000, total ad impressions needed to reach the target of 500,000, total ad cost of $10,000 and cost-per-conversion of $100.
The formula behind each calculation is as follows:
Total customers to reach target = Sales target / Average basket size
Total website visitors to reach target = Total customers to reach target / Conversion visitor to purchase
Total ad impressions to reach target = Total website visitors to reach target / Click-through-rate from ad to visitor
Total ad cost = Total ad impressions to reach target / 1,000 x Cost per 1k impressions
Cost-per-conversion = Total ad cost / Total customers to reach target