The Media Math Cheat Sheet: Every Marketing Metric Formula, One Funnel Chain
Every paid-media calculation you will ever be asked to do, whether in an interview, on a whiteboard, or in a live spreadsheet task, comes down to one chain and two rules. Learn the chain, avoid the two traps, and you can derive every metric from CPM to LTV:CAC on the spot. This is the cheat sheet I wish I'd had.
The one funnel chain that generates every metric
Stop memorizing formulas as a list. Memorize one chain and derive the rest. Every media calculation walks along this line:
Spend → Impressions → Clicks → Leads → Policies/Sales
(CPM) (CTR) (CVR) (bind/close rate)
Walking forward (I have a budget, what do I get?):
- Impressions = (Spend ÷ CPM) × 1,000
- Clicks = Impressions × CTR
- Leads = Clicks × CVR
- Sales = Leads × close rate
Walking backward (I have a target, what do I need?):
- Leads needed = Sales ÷ close rate
- Clicks needed = Leads ÷ CVR
- Impressions needed = Clicks ÷ CTR
- Spend needed = (Impressions ÷ 1,000) × CPM
If someone hands you a target and asks for a budget, walk the funnel backward. That is the entire exercise.
The marketing metric formulas, grouped by what they measure
Cost metrics
| Metric | Formula | Plain meaning |
|---|---|---|
| CPM | (Cost ÷ Impressions) × 1,000 | Cost per thousand views |
| CPC | Cost ÷ Clicks | Cost per click |
| CPL | Cost ÷ Leads | Cost per lead |
| CPA | Cost ÷ Acquisitions | Cost per customer |
Rate metrics
| Metric | Formula |
|---|---|
| CTR (click-through rate) | Clicks ÷ Impressions |
| CVR (conversion rate) | Conversions ÷ Clicks |
| Close / bind rate | Sales ÷ Leads |
| Bounce rate | Single-page sessions ÷ Sessions |
Value metrics
| Metric | Formula | Note |
|---|---|---|
| ROAS | Revenue ÷ Ad spend | Media only |
| MER | Total revenue ÷ Total marketing spend | Blended, all marketing |
| CAC | Total acquisition cost ÷ New customers | Fully loaded: media plus agency fees, tooling, and salaries |
| LTV | Avg. revenue × gross margin % × avg. tenure (years) | Lifetime value of a customer |
| LTV:CAC | LTV ÷ CAC | 3:1 is the healthy benchmark |
| Payback period | CAC ÷ (monthly gross profit per customer) | Months to recoup |
One CAC nuance is worth naming out loud. There is paid CAC (media cost divided by new customers) and fully loaded CAC (media plus agency, salaries, and tools, divided by new customers). They are wildly different numbers. If someone hands you an exercise, ask which one they mean. Asking that question is itself a signal of seniority.
Search-specific metrics: impression share
| Metric | Meaning |
|---|---|
| Impression share (IS) | Impressions you got ÷ impressions you were eligible for |
| IS lost to budget | You were eligible, you did not show, because you ran out of money |
| IS lost to rank | You were eligible, you did not show, because your ad was not good enough |
That distinction is the entire headroom argument. Impression share lost to budget is buyable with money. Impression share lost to rank needs better ads, better landing pages, or higher bids. Do not conflate them.
The two traps that actually catch people
Trap 1: Averaging the averages (the most common error)
You have three campaigns:
| Campaign | Spend | Conversions | CPA |
|---|---|---|---|
| A | $10,000 | 100 | $100 |
| B | $10,000 | 50 | $200 |
| C | $80,000 | 800 | $100 |
Wrong: average the CPA column. ($100 + $200 + $100) ÷ 3 = $133.
Right: total spend ÷ total conversions. $100,000 ÷ 950 = $105.
The wrong answer is 27% off, because Campaign B is tiny but gets equal weight in a simple average.
The rule: never average a ratio. Always rebuild it from the totals. The same applies to CTR, CVR, and ROAS. If you have a CPA column in a spreadsheet, do not average it. Sum spend, sum conversions, then divide.
Trap 2: Percentage change vs. percentage points
CPA went from 5% to 7%.
- That is a 2 percentage point increase.
- That is a 40% increase ($7 ÷ $5 = 1.4).
Both are true, and they give wildly different impressions. Say which one you mean, because people who blur this get caught. And remember: a 50% drop followed by a 50% rise does not get you back to where you started. 100 → 50 → 75.
Worked example: the impression-share headroom task
This is the classic media-planning exercise. Practice it until you can do it cold.
Given: Current spend $50,000/month • Impressions 2,000,000 • Impression share 40% • IS lost to budget 35% • IS lost to rank 25% • CTR 4% • CVR 5% • CPC $2.50 • CPA target $50.
Question: what is the volume headroom, and what does it cost to capture?
Step 1. How many impressions exist in total?
We got 2,000,000 at 40% share. Total eligible = 2,000,000 ÷ 0.40 = 5,000,000 impressions.
Step 2. How many are buyable with budget?
Impression share lost to budget is 35%. 35% × 5,000,000 = 1,750,000 impressions available to buy. (The 25% lost to rank is not buyable with money alone, so say that out loud.)
Step 3. What do those impressions turn into?
Clicks = 1,750,000 × 4% = 70,000 clicks. Conversions = 70,000 × 5% = 3,500 conversions.
Step 4. What does it cost?
Cost = 70,000 clicks × $2.50 = $175,000.
Step 5. Is it worth it?
CPA = $175,000 ÷ 3,500 = $50 per conversion, exactly at target. So the headroom is real and worth taking.
Step 6. The caveats that make you sound senior. Volunteer these unprompted:
- CPC will likely rise as you push further into the auction, so $50 CPA is a best case. Model 10 to 20% CPC inflation.
- The conversion rate on incremental, less-qualified traffic will likely be lower than on current traffic.
- How much of this is brand vs. non-brand? Brand headroom is often not incremental at all.
That last point is the one that separates you. Anyone can do the arithmetic. Almost nobody volunteers that the answer might be an illusion.
If they put you in a spreadsheet: the muscle memory
Pivot table, step by step:
- Select the data and insert a pivot table.
- Drag the dimension (Campaign, Channel, Month) into Rows.
- Drag raw numbers (Spend, Clicks, Conversions) into Values, set to Sum, not Count. Most spreadsheets default to Count if there is a blank or a text cell in the column, which is the classic embarrassment.
- Never drag CPA or CTR into Values and average them. Use a calculated field, or compute it outside the pivot from the summed totals.
For the calculated field, define it as Spend divided by Conversions. That computes from the summed totals, which is what you want.
Formulas worth knowing cold:
SUMIFS(spend_range, channel_range, "Paid Search")sums with conditions.XLOOKUP(lookup, lookup_array, return_array)is the modern lookup. Use it over VLOOKUP if your tool has it.IFERROR(a/b, 0)stops divide-by-zero errors from wrecking your table.- Percentage change:
(new - old) / old. - Weighted average CPA:
SUM(spend) / SUM(conversions), neverAVERAGE(cpa_column).
Sanity-check habit: after any pivot, confirm the grand total matches the sum of the raw column. If it does not, you have blanks, text in a number column, or a filter left on.
Quick mental-math anchors
- CPC × clicks = spend. Know two, you know the third. True for every pair in the chain.
- Conversions straight from spend: Conversions = Spend ÷ CPA. Obvious, but people forget it under pressure.
- CVR and CPA move inversely. Double the conversion rate, halve the CPA at the same CPC.
- 1% of 2,000,000 is 20,000. Anchor off that and scale.
- A 4% CTR on 1,000,000 impressions is 40,000 clicks. Practice the shifts.
What to say if you get stuck: narrate, don't guess
Don't go silent. Narrate the chain out loud:
"Let me work backward from the target. To get X sales at a close rate of Y, I need X÷Y leads. To get that many leads at a Z conversion rate, I need this many clicks. At this CPC, that's this much budget."
Narrating shows the thing they are actually testing: whether you think in the funnel chain. If you slip on the arithmetic mid-sentence, they will see the logic was right and correct the number with you.
Ask two questions before you start calculating:
- "Is this CPA on a lead or on a closed sale?" It completely changes the answer.
- "Should I treat brand and non-brand separately?" Blending them hides everything.
Asking those makes you look more competent than answering fast.
The one-line summary
Never average a ratio. Rebuild it from the totals. Walk the funnel backward from the target. And when the arithmetic gives you a beautiful answer, be the person who asks whether it's incremental.
Frequently asked questions
How do you calculate CPA from CPC and conversion rate?
CPA = CPC ÷ CVR. If a click costs $2.50 and 5% of clicks convert, your CPA is $2.50 ÷ 0.05 = $50. You can also get there from the funnel: Conversions = Spend ÷ CPA, so CPA = Spend ÷ Conversions.
Why shouldn't you average a CPA column?
Because a simple average weights every campaign equally regardless of size. A small, expensive campaign distorts the number. Always rebuild the ratio from totals: total spend ÷ total conversions. The same rule applies to CTR, CVR, and ROAS.
What is a good LTV:CAC ratio?
3:1 is the widely used healthy benchmark. Below about 1:1 you lose money on every customer. Far above 3:1 often means you are under-investing in growth. Always compare against fully loaded CAC (media plus agency, tooling, and salaries), not just paid CAC.
What's the difference between impression share lost to budget and lost to rank?
Impression share lost to budget means you were eligible to show but did not, because you ran out of money, so that headroom is buyable with more spend. Impression share lost to rank means your ad or bid was not strong enough, so that needs better creative, landing pages, or higher bids, not just budget.
Percentage points vs. percentage change: what's the difference?
Moving from 5% to 7% is a 2 percentage-point increase and, at the same time, a 40% relative increase (7 ÷ 5 = 1.4). Both are correct, so always state which one you mean.
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