CPO Calculator

CPO is an indicator of the cost of placing one order on the site. Marketers consistently use this metric to measure the effectiveness of marketing campaigns and various advertising channels. To find out the CPO (the calculation formula is given below), use the free online calculator from eSputnik. It is much easier and faster than manual counting. Moreover, you only need to substitute two values. We explain how to use the CPO calculator and why your business needs it.

CPO calculator: online calculation in seconds

Order means a real customer who paid money for your product, i.e. the company has income from it. To calculate the CPO on our online calculator, enter in the appropriate fields the number of marketing costs in the required currency and the number of orders received as a result. You will see the answer immediately.

Thus, in just a couple of minutes, you will be able to evaluate the results of all advertising campaigns carried out to determine the most effective ones.

How to calculate CPO manually

Not sure how to calculate your CPO in internet marketing? You only have two options:

• calculate CPO online using our calculator;
• use a special formula and count manually.

The CPO formula for an advertising campaign is as follows:

Let's say you spent $ 500 on social media ads. At the end of the advertising campaign, it turned out that 100 orders had been received. In this case:

CPO = 500 $ / 100 = 5 $.

That is, one order from social networks cost the company $ 5. How justified these costs are will be shown by an analysis of all advertising campaigns and an overall assessment of the effectiveness of advertising for a specific pricing policy of the business.

How to calculate the acceptable CPO in an ad campaign

If you want to get a certain amount of profit for a specific ad budget, you need to calculate the acceptable order value metric for the campaign. In this case, the calculation is a little more complicated. With an illustrative example, we will show you what and how to count.

Suppose the planned profit is $ 10,000 (this is the amount that the business wants to get from the product's sale). The marketer was allocated $ 1000 for advertising. At the same time, it is known that the conversion to sales is 25%, and the average check is $ 100.

We begin to count.

To reach the desired profit level with the indicated average check, you need to find 100 clients ($ 10,000 / $ 100).

With such conversions to sales, the number of received applications should be 400 (100 x 100% / 25%).

This means that the admissible CPO for this ad campaign is $ 10 ($ 1000/100 customers). Accordingly, the CPL (cost per lead) should not exceed $ 2.5.

When setting up advertising, the marketer will consider the indicated amounts and try not to go beyond the stated budget. Otherwise, the desired profit will not be achieved. Sometimes it may turn out that the established marketing budget is insufficient to generate such profit. Then you need to either increase advertising costs or reduce requests for the revenue side.

How to find out CPO in contextual advertising

To calculate the cost of an order in contextual advertising, a slightly different formula is used, namely:

What is the CPO calculation for?

It is necessary to calculate the cost of placing an order in order to:

• evaluate the effectiveness of different advertising channels and specific advertising campaigns;
• understand how much one client costs a business;
• analyze the profitability of marketing actions to stimulate sales;
• cut off unprofitable advertising channels and focus on those that bring the most profit;
• test marketing hypotheses and ad creatives for effectiveness.

Where to get data for calculating CPO

You will find all the data necessary for calculations in the Yandex.Metrica and Google Analytics analytics systems, as well as in your CRM. If it is not there, you will have to manually reduce the total number of orders received, taking into account all the channels of their receipt (website, landing page, orders to Instagram direct and Facebook messenger, etc.).

How to evaluate the CPO result

The main purpose of calculating CPO is to determine the effectiveness of different advertising channels to optimize your marketing strategy and more rational use of the budget allocated for the promotion. To evaluate the CPO result, it is enough to carry out a comparative analysis of advertising campaigns and calculate the cost of an order for each of them.

For example, a marketer simultaneously launched several different marketing activities for the same product and spent $ 5,000 on them. In this case, the funds were distributed as follows:

1. Setting up contextual advertising in Yandex.Direct and Google AdWords - $ 2000 budget.
2. Launch of targeted ads on Facebook and Instagram - $ 1000 budget.
3. Ordering banners on thematic sites and online media - $ 500 budget.
4. Payment for SEO-website promotion services - budget of $ 1500.

Now it is important for a marketer to track which channel more customers came from and what their value is. To do this, you need to calculate the CPO for each campaign separately.

Let's pretend that:

• 50 clients came from the context, then the CPO of Yandex.Direct and Google AdWords will be: $ 2000/50 = $ 40;
• 15 clients came from the target, then the CPO of advertising in social networks will be equal to: 1000 $ / 15 = 66.7 $;
• the banner attracted 10 clients, then the CPO of the banner ad is: $ 500/10 = $ 50;
• with the help of SEO, we managed to get 20 clients, then the CPO of promotion in search engines is: $ 1,500 / 20 = $ 75.

The analysis showed that contextual advertising was the most effective in this particular case. Not only did the most customers come from it, but the order value in this campaign was also the cheapest.

Hence the conclusion: to promote the product from the example, it is most effective to invest money in the context, since the client's cost is lower here than through other channels.

After such calculations, the marketer will understand precisely how to distribute the advertising budget in the future and which channels need to be cut off or limited due to low profitability.

If, in the course of calculations, it turns out that the CPO is lower than the income from the sale of the product, such an advertising campaign is considered unprofitable because it does not even pay for itself. It is enough to calculate the return on marketing investments on our online ROMI calculator to be convinced of this.

Knowing how much each order costs you, it is much easier to plan an advertising budget, forecast profits, and form a company's pricing policy. Successful calculations!