Formulas for Search Campaigns

Important Formulas for Search Campaigns 

Running a search campaign in Google Ads is not just about choosing keywords and creating ads. The real success comes from measuring results and making smart decisions. Numbers play a big role here, and marketers use a few simple but powerful formulas to check how well their campaigns are performing.

In this blog, I will explain the most useful formulas used in search campaigns. Each formula is broken down into three parts – the formula itself, the meaning in easy words, and a practical example.

Click-Through Rate (CTR)

Meaning:
CTR tells you how many people clicked on your ad compared to the number of people who saw it. A higher CTR means your ad is catching attention and is relevant.

Formula:

CTR = Clicks / Impressions × 100

Example:
Your ad was shown 8,000 times and got 400 clicks.

CTR = 400 / 8,000 × 100 = 5%

Cost Per Click (CPC)

Meaning:
CPC shows the amount you pay for click. It helps you know if your ad budget is being spent efficiently.

Formula:

CPC = Total Spend / Total Clicks

Example:
If you spend ₹6,000 and get 300 clicks:

CPC = 6,000 / 300 = ₹20

You are paying ₹20 per click.

Conversion Rate (CVR)

Meaning:
Conversion rate shows how many people completed your goal (like signing up or buying) after clicking on your ad.

Formula:

Conversion Rate = Conversions / Clicks × 100

Example:
 From 250 clicks, if 25 people bought your course:

Conversion Rate = 25 / 250 × 100 = 10%

So, your campaign has a 10% conversion rate.

Cost Per Acquisition (CPA)

Meaning
CPA tells you the cost of getting one customer or lead. It is very important to know whether you are making profit.

Formula:

CPA = Total Spend / Conversions

Example:
 If you spent ₹12,000 and got 60 conversions:

CPA = 12,000 / 60 = ₹200

So, each new customer cost you ₹200.

Return on Ad Spend (ROAS)

Meaning:
ROAS measures how much revenue you earned for every rupee spent on ads. A higher ROAS means your campaign is profitable.

Formula:

ROAS = Revenue / Ad Spend

Example:
You spend ₹5,000 and earn ₹25,000 in sales:

ROAS = 25,000 / 5,000 = 5

This means for every ₹1 you spent, you earned ₹5 back.

Quality Score

Meaning:
Quality Score is Google’s rating (1–10) that decides how good your ad and keywords are. Higher scores reduce CPC and improve ad ranking.

Formula:
 Google does not reveal the exact formula, but it is based on three things:

• Click-Through Rate (CTR)
• Relevance of the ad to the keyword
• Landing page experience
  
  Example:
   If your ad for “Digital Marketing Course” is relevant, gets clicks, and has a good landing page, your keyword may receive a Quality Score of 8/10.

Impression Share

Meaning:
 Impression Share shows how many times your ad was actually displayed compared to the number of times it could have been displayed.

• If your impression share is high, it means your ad is visible to most of the audience.
• If it is low, you are missing chances, either because of limited budget or because your ad rank is not strong enough against competitors.

Formula:

Impression Share = Number of Impressions / Total Eligible Impressions × 100
Example:
Let’s say your ad was eligible to appear 40,000 times in searches, but it was shown only 24,000 times.

Impression Share = 24,000 / 40,000 × 100 = 60%

Average Position (Old Metric but Useful to Know)

Meaning:
 This metric showed the average position of your ad on the search results page. While Google has replaced it with Auction Insights, it’s still good to understand.

Example:
 If your average position was 2.2, it means your ad usually showed in the 2nd or 3rd spot.