PPC formula question.

[Lingo]

I was reading a post somewhere about someone testing out a PPC campaign. He expalined a formula which he used to workout his CPC.

Now when i read the explanation for the formula and the numbers he uses as an example, i cant seem to work it out in order to apply it to my attemp at PPC.The formula i understand, its just numbers he uses as an example do not work out for me.

Formula = (CPA/ROI)*CR=CPC

This formula says my CPC should be equal to my cost per acquisition ($1.20) divided by how much I want to make (100% profit) multiplied by my conversion rate.

CPA of $1.20
100% ROI
CPC = $0.09.

Is this formula correct or is there any other recommended way for me to calculate CPC.

Cheers in advanced for the help and appologies for the level of newbness of this question.

 

[stefanie]

Maybe I'm just being stupid here, but how can you expect to make 100% profit if you spend ANYTHING on advertising?

 

[Lingo]

Here is the link to the post, just in case it helps to give some background on my question.

My First Try At PPC to CPA Affiliate Marketing

 

[mberman84]

hey lingo, this is the post from my blog. i think the part you're getting confused at is dividing the CPA by ROI. if you want your ROI to be 100% (you get 2 dollars for every dollar you put in) you need to divide by 2.

 

[Lingo]

Whoa, got an answer from the man who wrote it.

Cheers for that mate, that does clear it up for me.

 

[mberman84]

Whoa, got an answer from the man who wrote it.

Cheers for that mate, that does clear it up for me.

my pleasure, shoot me an email if you need anything else.