What are digital marketing formulas?
Digital marketing formulas thrive on data, and formulas are the key to transforming numbers into insights. They help marketers evaluate performance, optimise campaigns, and make profitable decisions across SEO, social media, paid ads, email, e-commerce, and SaaS. By applying formulas like CTR, CAC, ROI, LTV, and MRR, businesses can measure traffic quality, customer value, and campaign profitability with precision.
Digital marketing formulas. Instead of guessing, marketers rely on these formulas to track what works and what doesn’t, ensuring smarter investments and sustainable growth. From lead generation to customer retention, each formula acts as a compass, guiding strategies toward better ROI. Mastering them means turning data into action and action into measurable results.
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Why Exist Digital Marketing Formulas?
Digital marketing formulas are important for these reasons:
- To standardise measurement across campaigns
- To compare performance (e.g., which ad is better?)
- To optimise budget allocation
- To prove ROI to clients or management
Advanced Digital Marketing KPI Metrics and Formulas.
What are Digital Marketing Formulas – Explained with Examples?
These are 45 digital marketing formulas:
| Formulas/ Full Form | Formula | Meaning | Example |
| 1. CTR – Click-Through Rate | CTR(%) = ( Clicks / Impressions )×100 | Measures how many people clicked on your ad or link out of the total who saw it. | If your ad got 2,000 impressions and 100 clicks, CTR=(100÷2000)×100=5% |
| 2. CPC – Cost Per Click | CPC = Total Spend / Total Clicks | Average cost paid for each click on your ad. | If you spent ₹5,000 and received 400 clicks,CPC=5000÷400=₹12.5 per click |
| 3. CPA – Cost Per Acquisition | CPA =Total Spend / Total Conversions | Tells how much it costs to acquire one customer/lead. | If you spent ₹20,000 and got 200 conversions, CPA=20000÷200=₹100 per conversion |
| 4. ROAS – Return on Ad Spend | ROAS=Revenue from Ads / Ad Spend | Measures revenue earned per ₹ spent on ads. | If you spent ₹50,000 and earned ₹2,00,000 from ads,ROAS=200000÷50000=4(or400%) |
| 5. CLV – Customer Lifetime Value | CLV=Average Purchase Value × Purchase Frequency × Customer Lifespan | Predicts the total revenue a business can expect from a customer during their lifetime. | If the average order value is ₹1,000, the purchase frequency is 5 per year, and the lifespan is 3 years, CLV=1000×5×3=₹15,000 |
| 6. CR – Conversion Rate | CR(%)=(Conversions / TotalVisitors)×100 | Percentage of visitors who completed the desired action (purchase, signup, etc.). | If your website had 5,000 visitors and 250 conversions, CR=(250÷5000)×100=5% |
| 7. CPL – Cost Per Lead | The average amount customers spend per order. | How much do you spend to generate one lead? | If you spent ₹10,000 and got 400 leads, CPL=10000÷400=₹25 per lead |
| 8. AOV – Average Order Value | AOV=Total Revenue / Total Orders | The average amount customers spend per order. | If your eCommerce earned ₹2,00,000 from 800 orders,AOV=200000÷800=₹250perorder |
| 9. Bounce Rate | Bounce Rate (%) = (Single Page Visits / Total Visits)×100 | Percentage of visitors who leave without taking action. | If you had 1,000 visits and 400 bounced, Bounce Rate =(400÷1000)×100=40% |
| 10. SEO KPI – Organic CTR (Organic Click-Through Rate) | Organic CTR=(Organic Clicks / Organic Impressions)×100 | Measures how effective your organic listings are at attracting clicks. | If your page appeared 50,000 times and got 5,000 clicks, Organic CTR =(5000÷50000)×100=10% |
| 11. CPM – Cost Per Mille (Thousand Impressions) | CPM=Total Spend / Total Impressions×1000 | Average cost to show your ad 1,000 times. | If you spent ₹8,000 and got 400,000 impressions, CPM=(8000÷400000)×1000=₹20 |
| 12. CPE – Cost Per Engagement | CPE=Total Spend / Total Engagements | Average cost for each like, share, comment, or interaction. | If you spent ₹3,000 and got 600 engagements, CPE=3000÷600=₹5 |
| 13. CPI – Cost Per Install (Mobile Apps) | CPI=Total Spend / Total App Installs | How much do you pay for each app download? | If your ad spend is ₹15,000 and you got 1,000 installs, CPI=15000÷1000=₹15 |
| 14. ROI – Return on Investment | ROI(%)=(Net Profit / Investment)×100 | Percentage of profit earned compared to money invested. | If you invested ₹1,00,000 and earned ₹1,50,000 revenue with ₹40,000 cost, profit = ₹50,000.ROI=(50000÷100000)×100=50% |
| 15. ARPU – Average Revenue Per User | ARPU=Total Revenue / Number of Users | Average revenue generated per customer/user. | If revenue is ₹5,00,000 from 2,000 users,ARPU=500000÷2000=₹250 |
| 16. Engagement Rate (ER) | ER(%)=(Total Engagements / Total Followers or Reach)×100 | Measures how actively your audience interacts with your content. | If a post gets 2,000 engagements and reaches 40,000 people, ER =(2000÷40000)×100=5% |
| 17. Email Open Rate | Open Rate(%)=(Emails Opened / Emails Sent − Bounces)×100 | Percentage of delivered emails that were opened. | If you sent 10,000 emails, 500 bounced, and 2,850 opened, Open Rate = (2850÷9500)×100=30% |
| 18. Email CTR – Click-Through Rate (Email) | Email CTR(%)=(Clicks/ Emails Delivered)×100 | Shows how many recipients clicked on links inside your email. | If you delivered 9,000 emails and 900 clicks, Email CTR =(900÷9000)×100=10% |
| 19. Lead-to-Customer Rate | Lead−to−Customer Rate(%)=(Customers / Leads)×100 | Percentage of leads that convert into paying customers. | If you generated 2,000 leads and 100 became customers, Rate =(100÷2000)×100=5% |
| 20. Churn Rate (Customer Loss Rate) | Churn Rate(%)=(Customers Lost / Total Customers at Start)×100 | Percentage of customers who stop using your service in a given period. | If you had 1,000 customers at the start and lost 100, Churn Rate = (100÷1000)×100=10% |
| 21. CAC – Customer Acquisition Cost | CAC=Total Sales & Marketing Costs / Total New Customers Acquired | The average cost to acquire one customer. | If you spent ₹5,00,000 on marketing and acquired 2,500 customers,CAC=500000÷2500=₹200 per customer |
| 22. LTV: CAC Ratio (Lifetime Value to Customer Acquisition Cost Ratio) | LTV: CAC=Customer Lifetime Value / Customer Acquisition Cost | Shows if customer acquisition is profitable. Ideally >3. | If CLV = ₹15,000 and CAC = ₹3,000,LTV:CAC=15000÷3000=5 |
| 23. VTR – View-Through Rate (Video Ads) | VTR(%)=(Completed Views / Total Impressions)×100 | Shows what % of viewers watched the video ad till the end. | If ad impressions = 50,000 and completed views = 10,000,VTR=(10000÷50000)×100=20% |
| 24. CPV – Cost Per View (Video Ads) | CPV=Total Spend / Total Video Views | The average cost for each video view. | If you spent ₹12,000 and got 6,000 views, CPV=12000÷6000=₹2 |
| 25. SOV – Share of Voice | SOV(%)=(Brand Mentions / Total Market Mentions)×100 | Shows brand visibility compared to competitors. | If your brand got 5,000 mentions out of 25,000 market mentions, SOV =(5000÷25000)×100=20% |
| 26. SEO Visibility Index | Visibility=Weighted Keyword Rankings / Total Possible Score | A measure of how visible a website is in search engines. | If your ranking score = 300 out of 1,000,Visibility=300÷1000=0.3(30%) |
| 27. Domain Authority Growth Rate (DAGR) | DAGR(%)=(DACurrent−DAPrevious / DAPrevious)×100 | Measures SEO domain authority improvement. | Percentage of users who added products to the cart but didn’t buy. |
| 28. Social Media Reach Growth Rate | ReachGrowth(%)=(Current Reach−Previous Reach / Previous Reach)×100 | Percentage growth of reach over a period. | Reach increased from 1,00,000 to 1,50,000, Growth=(150000−100000)÷100000×100=50% |
| 29. Customer Retention Rate (CRR) | CRR(%)=(E−N / S)×100 Where:EEE = Customers at End of PeriodNNN = New Customers AcquiredSSS = Customers at Start of Period | % of customers retained in a time frame. | Start = 1,000, End = 1,100, New = 200CRR=(1100−200)÷1000×100=90% |
| 30. MRR – Monthly Recurring Revenue (SaaS) | MRR=ARPU×Total Subscribers | Predictable monthly revenue from subscriptions. | If ARPU = ₹1,000 and subscribers = 500,MRR=1000×500=₹5,00,000 |
| 31. ROMI – Return on Marketing Investment | ROMI(%)=(Revenue Attributed to Marketing−Marketing Cost / Marketing Cost)×100 | Shows profit generated from marketing activities. | Revenue = ₹4,00,000, Marketing Cost = ₹1,00,000ROMI=(400000−100000)÷100000×100=300% |
| 32. EPV – Earnings Per Visitor | EPV=Total Revenue / Total Visitors | Average revenue generated from each website visitor. | Revenue = ₹5,00,000, Visitors = 50,000EPV=500000÷50000=₹10 per visitor |
| 33. RPE – Revenue Per Email | RPE=Total Revenue from Email / Emails Sent | How much do you spend to generate one lead? | Revenue = ₹1,20,000, Emails Sent = 40,000RPE=120000÷40000=₹3 per email |
| 34. ATC Rate – Add to Cart Rate (E-commerce) | ATC Rate(%)=(Add−to−Cart Actions / Product Page View)×100 | Shows how many visitors added products to the cart. | 2,000 ATCs from 10,000 product views, ATC Rate= (2000÷10000)×100=20% |
| 35. Cart Abandonment Rate | Cart Abandonment Rate(%)= (Carts−Completed Purchases / Carts)×100 | Percentage of users who added products to the cart but didn’t buy. | 5,000 carts, 3,500 purchases,Rate=(5000−3500)÷5000×100=30% |
| 36. Checkout Abandonment Rate | Checkout Abandonment Rate(%)= (Checkouts−Completed Purchases / Checkouts)×100 | Drop-off at the checkout stage. | 2,000 checkouts, 1,600 purchases,Rate=(2000−1600)÷2000×100=20% |
| 37. Repeat Purchase Rate (RPR) | RPR(%)=( Customers with More than 1 Purchase / Total Customers)×100 | Shows customer loyalty and repeat buying. | Out of 2,000 customers, 600 bought again, RPR =(600÷2000)×100=30% |
| 38. DAU/MAU Ratio (Stickiness and Daily Active Users / Monthly Active Users) | Stickiness(%)=(DAU / MAU)×100 | Measures how often monthly users return daily. | DAU = 20,000, MAU = 1,00,000Stickiness=(20000÷100000)×100=20% |
| 39. CPD – Cost Per Download | CPD=Total Spend / Total Downloads | Used in app and content marketing. | Spend = ₹50,000, Downloads = 10,000CPD=50000÷10000=₹5 |
| 40. CPV – Cost Per Viewable Impression (Display Ads) | CPV=Total Spend / Viewable Impressions | Charges only when an ad is viewable (per MRC standard). | Spend = ₹25,000, Viewable Impressions = 5,00,000CPV=25000÷500000=₹0.05 |
| 41. Net Promoter Score (NPS) | NPS=%Promoters−%Detractors | Measures customer satisfaction & loyalty. | 60% promoters, 15% detractors → NPS = 60 – 15 = 45 |
| 42. Virality Coefficient | VC=(Number of Invitations×Conversion Rate) | Growth factor in viral/social apps. | Each user invites 5, 20% convert → 5 × 0.2 = 1.0 (viral loop) |
| 43. Email Click-to-Open Rate (CTOR) | CTOR(%)=(Unique Clicks / Unique Opens)×100 | Clicks per opens, not per sent. | 2,000 clicks ÷ 8,000 opens = 25% CTOR |
| 44. Revenue per Click (RPC) | RPC=Total Revenue / Total Clicks | Avg. revenue generated per click. | ₹1,00,000 revenue ÷ 20,000 clicks = ₹5 per click |
| 45. Customer Retention Cost (CRC) | CRC=Retention Spend / Customers Retained | Shows the efficiency of retention campaigns. | ₹1,00,000 ÷ 2,000 retained = ₹50/customer |
Conclusion. (Digital Marketing Formulas)
Digital marketing formulas transform raw data into actionable insights, empowering businesses to make informed decisions rather than relying on guesswork. They highlight the true performance of campaigns across SEO, social media, ads, email, e-commerce, and SaaS, making it easier to track progress and allocate budgets effectively. By mastering formulas like ROI, CAC, LTV, MRR, and AOV, marketers gain a clear understanding of profitability, customer value, and growth opportunities.
Digital marketing formulas. Ultimately, these formulas serve as a roadmap for optimisation and scalability, ensuring that every action contributes to long-term success. In today’s competitive landscape, those who apply digital marketing formulas with precision are better equipped to achieve stronger ROI, sustainable growth, and a winning digital strategy.
If you would like, you can also take the opportunity to delve deeper into our digital marketing course.
FAQs
What is the CPM formula?
The CPM formula is used in digital marketing and advertising to calculate the Cost per Mille (thousand impressions).
Here’s the formula:
CPM=Total Cost of Campaign / Total Impressions × 1000
Explanation:
1. Total Cost of Campaign → The amount you spend on an ad campaign.
2. Total Impressions → The number of times the ad is displayed (seen, not necessarily clicked).
3. Multiply by 1000 because CPM measures the cost per 1,000 impressions.
Example:
If you spend ₹50,000 and get 10,00,000 impressions:
CPM=50,000 / 10,00,000×1000=₹50
👉 That means you’re paying ₹50 for every 1,000 impressions.
What is the formula for ROI?
The ROI (Return on Investment) formula is used to measure how profitable an investment or campaign is compared to its cost.
Here’s the formula:
ROI = Net Profit / Total Investment×100
Explanation:
1. Net Profit = Total Revenue – Total Cost
2. Total Investment = The amount you invested in the campaign/project.
3. Multiply by 100 to express ROI as a percentage.
Example:
If you spent ₹1,00,000 on a marketing campaign and earned ₹1,50,000 in revenue:
ROI=(1,50,000−1,00,000) / 1,00,000 × 100=50%
👉 That means your campaign generated a 50% return on your investment.
What is the CPA formula?
The cost you pay to acquire one customer/action (e.g., purchase, signup, lead).
Formula:
CPA=Total Cost of Campaign/Total Conversions
Example:
If you spend ₹50,000 and get 250 conversions:
CPA=50,000/250=₹200
👉 You pay ₹200 per conversion.
What is the formula for CTR?
The CTR (Click-Through Rate) formula measures how often people click on your ad after seeing it.
Formula:
CTR=Total Clicks/Total Impressions×100
Explanation:
1. Total Clicks = Number of times users clicked your ad/link.
2. Total Impressions = Number of times your ad/link was shown.
3. Multiply by 100 to get a percentage.
Example:
If your ad got 2,000 clicks from 1,00,000 impressions:
CTR=2,000/1,00,000×100=2%
👉 That means 2 out of every 100 people who saw your ad clicked it.
What is CTC in Digital marketing formulas?
CTC (Click to Conversion/Click-through Conversion) is an index used to measure the effects of Internet ads and indicates the rate of conversions in relation to total clicks.
CTC Formula:
CTC(%)=Total Conversions/Total Clicks×100
Explanation:
1. Total Conversions → The number of desired actions completed (purchase, signup, download, etc.).
2. Total Clicks → The number of times people clicked on your ad/link.
3. Multiply by 100 to express it as a percentage.
Example:
If your ad received 5,000 clicks and generated 500 conversions:
CTC=500/5000×100=10%
👉 This means 10% of clicks turned into conversions.
What is CVR in marketing?
In digital marketing, CVR stands for Conversion Rate. It measures the percentage of users who take the desired action (conversion) after clicking on an ad, visiting a landing page, or engaging with a campaign.
CVR Formula:
CVR(%)=Total Conversions/Total Clicks×100
Explanation:
1. Total Conversions → Number of actions completed (purchase, signup, download, lead form, etc.).
2. Total Clicks → Number of clicks received on the ad/landing page.
2. Multiply by 100 to get a percentage.
Example:
If your ad got 2,000 clicks and resulted in 100 conversions:
CVR=100/2000×100=5%
👉 That means 5% of people who clicked actually converted.
What is CAC in Digital marketing formulas?
In marketing & business, CAC stands for Customer Acquisition Cost. It tells you how much it costs your business to acquire one new customer.
CAC Formula: CAC=Total Marketing & Sales Expenses/Number of New Customers Acquired
Explanation:
1. Total Marketing & Sales Expenses → Includes ad spend, marketing team salaries, software tools, sales commissions, etc.
2. Number of New Customers Acquired → The actual paying customers gained during that period.
Example:
If your company spent ₹5,00,000 on marketing & sales in a month and gained 1,000 new customers:
CAC=5,00,000/1000=₹500
👉 It costs you ₹500 to acquire each customer.
What is the meaning of ROAS?
In digital marketing, ROAS stands for Return on Ad Spend.
It tells you how much revenue you earn for every unit of currency spent on advertising.
ROAS Formula:
ROAS=Revenue from Ads/Cost of Ads
Explanation:
1. Revenue from Ads → Total sales directly attributed to your ad campaigns.
2. Cost of Ads → The amount you spent on those ads.
3. ROAS is often shown as a ratio (e.g., 4:1) or as a multiple (e.g., 4×).
Example:
If you spend ₹1,00,000 on ads and generate ₹4,00,000 in revenue:
ROAS=4,00,000/1,00,000=4
👉 Your ROAS is 4:1 (you earn ₹4 for every ₹1 spent).
What is CPA in Digital marketing formulas?
In marketing, CPA stands for Cost Per Acquisition (sometimes called Cost Per Action).
It tells you how much it costs to acquire one conversion (customer, lead, or specific action).
CPA Formula:
CPA=Total Campaign Cost/Total Conversions
Explanation:
1. Total Campaign Cost → The total money you spent on the campaign (ads, platform costs, etc.).
2. Total Conversions → The number of desired actions completed (purchase, signup, download, form submission, etc.).
Example:
If you spent ₹50,000 on ads and got 250 conversions:
CPA=50,000/250=₹200
👉 That means it costs you ₹200 for each conversion.