Cost Per Mille (CPM) calculator
About this calculator?
CPM
CPM is a metric for determining the cost of an advertisement per 1,000 impressions or clicks. It is a common pricing strategy of self-serve advertising in digital marketing. Businesses that pay for CPM advertising are paying for the capacity of the advertiser to expose them to 1,000 individuals. ‘Mille’ is the Latin word for one thousand.
The approach is based on impressions, which is a statistic for counting the number of digital views or engagements for a certain ad. ‘Ad views’ is another term for impressions. Advertisers pay a predetermined charge to website owners for every thousand ad impressions. While an impression counts the number of times an ad was displayed on a website, it does not count the number of times an ad was clicked.
CTR
CTR is a metric that represents the percentage of individuals that viewed an advertisement and clicked on it. Advertisers typically use the CTR to determine the performance of a CPM campaign. An advert’s performance cannot be judged on the success of its CTR alone because a user can see and not click on that ad, yet it may still have an impact.
CPC
CPC is an online marketing approach in which advertisers are charged a fee each time one of their adverts is clicked. It is essentially a means of purchasing visitors to your website rather than trying to ‘earn’ them naturally.
One of the most common types of CPC is search engine advertising. When a user searches for a term relating to their company offering, it allows marketers to bid for ad placement in a search engine's sponsored links.
CPA
CPA is a marketing term that calculates the total costs of a client doing a certain action that results in a conversion. Conversions are sometimes confused with sales, although it can also refer to a click, a download, or an installation.
Impressions
The number of ad impressions may differ from the number of visits to a website where the ad is shown. An ad could appear in two places on a website, for example, a horizontal banner over the top of the page and a vertical side banner below the page's text. The advertiser pays for two impressions per page visit in this case.
The end-goal.
The end-goal of utilising this calculator is to allow you to identify CPM data from the Ad Budget and Expected Impressions from an advertisement campaign/ Also, you can calculate the Ad Budget from the CPM and Expected Impressions. Finally, the number of Impressions can be determined from the Ad Budget and the CPM.
All three of these options can provide evidence for how the advertisement budget is being managed within a business, how effective your advertising campaigns are being promoted and the traction that you have with your target market.
Necessary terms.
CPM: An abbreviation of ‘Cost Per Mille’ referring to the cost of thousand impressions. Can also be called ‘Cost Per Thousand’ (CPT).
CTR: An abbreviation of ‘Click-Through Rate’ referring to the measurement of whether an ad was clicked on, representing the percentage of people who saw the ad and clicked on it.
CPC: An abbreviation of ‘Cost Per Click’ referring to the cost an advertiser pays each time a website visitor clicks on an advert. Can also be called ‘Pay Per Click’ (PPC).
CPA: An abbreviation of ‘Cost Per Acquisition’ referring to when an advertiser only pays each time a website visitor makes a purchase after clicking an advert. Can also be called ‘Cost Per Action’ (CPA).
Ad Budget: This is how much funds are committed to the online/digital advertisement campaign.
Impressions: This is the number of users who saw an advertisement campaign but did not interact with it, such as clicking, downloading, or installing.
The formula.
CPM
Cost Per Mile: CPM
Ad Budget: AB
Expected Impressions: EI
CPM = (1000 * AB) / EI
Ad Budget
Ad Budget: AB
Cost Per Mile: CPM
Expected Impressions: EI
AB = CPM * (EI / 1000)
Impressions
Impressions: IS
Ad Budget: AB
Cost Per Mile: CPM
IS = (1000 * AB) / CPM
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