Enter the total advertising cost and the number of orders placed into the calculator to determine the cost per order (CPO).
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CPO (Cost Per Order) Formula
The following formula is used to calculate the cost per order of an advertising budget.
CPO = AC / O
- Where CPO is the cost per order ($/order)
- AC is the total cost of the advertising campaign ($)
- O is the number of orders placed as a result of the advertising
What is CPO?
CPO, short for cost per order, is a term used in marketing and advertising to describe the total cost in advertising it takes to get one order.
This metric is used as a return on advertising metric for online businesses, but it can also be applied to physical businesses that spend money on advertising. In those cases, it’s just harder to pinpoint if an order was generated because of the advertising or something else.
How to caculate CPO?
The following example problem outlines how to calculate cost per order (CPO).
First, determine the total amount of money spent on the advertising campaign. In this example, an online retailer spent $10,000.00 over a month-long period in advertising.
Next, determine the number of orders that resulted from that advertising. For this example, the advertising campaign yielded 500 orders over the same month-long period.
Finally, calculate the CPO using the formula above:
CPO = AC / O
CPO = 10000 / 500
CPO = $20 per order