CPM Calculator: Your Key to Smarter Advertising

This CPM Calculator will help you to track your Cost per Mille (Cost per thousand impressions) for your advertising campaigns.

A CPM Calculator is a handy tool for marketing professionals who want to understand the ROI (Return on Investment) from ad campaigns.

Typically, CPM calculators are used to help business leaders better understand how much they’re spending on acquiring customers and leads. It can also be used in conjunction with other marketing metrics, to provide an insight into brand reach, advertising effectiveness, and more.

The CPM calculator below will ensure you don’t have to worry about working with mathematical formulas when you want to get a clearer view of the cost you’re paying for impressions.

CPM Calculator

What is CPM? An Introduction

CPM stands for Cost per Mille. The word Mille translates to “thousand”, meaning your CPM metric provides an insight into how much you’re paying per every thousand impressions. CPM is one of the most common ad pricing models used for PPC campaigns and similar advertising strategies.

Rather than looking at how much you’re paying one ad at a time, CPM provides a broader view of the impact of your ads. After all, it’s difficult to understand the direct impact a single impression has on the growth of your business or revenue.

Impressions can occur accidentally on a single ad. Additionally, a single person may end up viewing an add dozens of times in one day, without ever clicking anything.

Looking at the cost of an ad per every thousand impressions helps to wean out some of the random factors which can influence the results of your campaigns.

How is CPM Used in Ads and Marketing?

As mentioned above, CPM is a metric used in the advertising world, as well as a pricing model for PPC or Pay-Per-Click campaigns. It focuses on the cost you pay for “impressions”. In other words, you’re looking at how many people are exposed to your ad, rather than how many people complete an action by clicking on a link, or converting into a buyer.

Because CPM focuses on impressions, it’s generally more suited to marketing strategies with a focus on developing brand awareness or exposure. If you want to ensure you’re reaching as many people as possible, you may look at launching some CPM campaigns.

Although CPM can help companies to calculate things like brand reach, an impression isn’t exactly the same as reach. If you were determining the reach of your ads, using a channel like Facebook or Instagram, you would be looking at how many people were actually seeing your campaigns. Impressions simply tell you how many times your ad has been displayed to users.

After all, just because an ad is served to a customer, doesn’t mean they’re actively seeing it, reading the copy, or engaging with the campaign in any way. In many cases, CPM is used to help publishers and advertisers quantify the efficacy of their ad placement strategy, and assist them in understanding other crucial metrics, like how click-through rates differ across advertising channels.

Why is CPM Important?

Compared to other marketing metrics like “CPC” or Cost per Click, CPM can seem a little less valuable. You’re quantifying the number of times your ad is displayed, rather than looking at how often people actually interact with your campaigns. However, CPM can be a very useful metric.

One of the reasons digital advertising often offers more benefits than traditional marketing, is it provides advertisers and publishers with more ways to analyze, compare, and optimize campaigns, based on valuable data. With the correct data, and a little expertise, advertisers can determine exactly how effective each of their marketing strategies are across different channels.

Using CPM, advertisers can learn more about the performance of their ad, and how it’s being displayed. For instance, if you know how much you’re paying for your ad to be served on Facebook and Google, you can compare this information to how many leads or clicks you get from each channel, to determine which option is more cost-effective.

CPM can be used to:

• Improve visibility: Optimizing your ad campaigns for CPM is a good way to expand the reach and visibility of your marketing strategy, making sure your brand stands out.
• Increasing conversions: When you compare your CPM to other metrics, like CTR (Click through rate), you can see which of your marketing strategies are generating the best ROI (Return on Investment) for conversion purposes.
• Optimization: Monitoring your CPM results can help you to make changes to your ad copy, placement, and other factors which might be impacting your reach and potential conversions, this gives you more scope for optimization.

How to Calculate CPM

If you want to keep things pretty simple, you can calculate your CPM just by using our calculator above. However, it’s also possible to determine your CPM manually. All you need to do is figure out how much you’re paying for an ad campaign to be delivered to 1000 users.

In other words, you divide the cost of your ad campaign, by 1000 impressions, to give you your total. Calculating CPM is relatively straightforward, but it does require you to have some basic data on your campaign. In other words, you need to know exactly how much you’re paying for your ad campaigns, as well as the number of impressions you’ve received.

For most marketing specialists, the CPM model has the benefit of being relatively simple. It’s easy to understand, implement, and track for financial purposes. However, it does have some disadvantages. The value of CPM can sometimes be difficult to quantify without other metrics. It’s hard to know for certain whether displaying your ads to the right people is actually adding up to anything of value.

If you want to track things like conversions, you’ll need to look at other metrics, such as the cost per click (CPC) model, or the cost per action (CPA) model.

CPM Formula

To measure CPM, you’ll divide the total cost of the campaign you pay for, by the number of impressions you receive. The result is then multiplied, to deliver your full CPM rate.

What is a Good CPM?

Determining a good CPM can be a little tricky without first considering all of the variables at place. Advertisers need to look at a number of factors, including previous ad performance, advertising ROI, and industry-relevant advertising data, to determine a “benchmark” for their CPM campaigns.

In most cases, it can take a little time to collect enough data to fully understand just how effective an advertising campaign really is. Many business leaders will run multiple campaigns across different websites, using the information they collect from each instance to make better decisions.

Some advertisers assume that a lower CPM is always better, however that isn’t always the case. In some instances, paying less for your CPM can often mean that you end up with poor conversion rates and lower quality traffic. With this in mind, it’s worth looking at CPM in the context of other crucial marketing metrics, to help you make the right decisions.

When calculating whether a CPM is good or bad, you can also sometimes look at the “industry average” using reports online. Once again, it’s worth considering this data carefully, as a higher CPM than the industry average isn’t always a bad thing if it also means you’re getting more conversions.

Which Factors Influence CPM Value?

There are various factors which can impact the value of a CPM campaign for publishers and advertisers. Some of the most important points you may need to consider when working on your own campaigns include:

• Location: The location in which ads are being served can affect the CPM cost. If an ad is served in a country with a high GDP, it might cost more than an ad served in a country with a lower GDP. You’ll be able to check this when purchasing your campaigns.
• Device type: Some companies selling CPM campaigns will charge different costs depending on whether you’re targeting people using a desktop device, or a mobile device. There are also options to specifically target people using certain types of device, such an Apple smartphone.
• Ad format: The type of ad you serve will also play a part in your overall CPM cost. For instance, if you’re serving a larger banner-style ad, you’ll pay more for a placement than you would for a much smaller, miniature ad. The more space you take up, the more you pay.
• Ad placement: Placement is crucial when optimizing CPM. Prominent advertising placed “above the fold” tends to reach a wider audience and generate a higher click through rate. This means you tend to place a little more for a premium placement.
• Niche: If you’re paying for your ads to be displayed on specific websites, you may pay more for ads targeted at a very specific group of customers. A medical journal read exclusively by doctors may charge more for ad placement than a basic news website.
• Number of ads: Serving a larger number of ads within the same place can usually translate to a lower CPM, as it means you’ll be able to capture the attention of more viewers in a smaller space of time. However, it’s important not to overwhelm your audience with ads.
• Previous ad performance: In some cases, if a company has a strong track record of success, you may need to pay more for your ad placement. If a business can prove their ad placements generate results, you’ll generally pay more for your CPM.

CPM is Affected by Seasonality

Another point to keep in mind when you’re calculating CPM, is it can be affected significantly by the time of year, or “seasonality”. In many cases, CPM rates are much higher during times when customers are likely to be spending more time on their devices, shopping for items.

For instance, you may find you end up paying a lot more for CPM during the holiday season, when many companies offering ad placements know their customers will be more active and shopping for gifts. There are various times of the year when CPM can rise and fall, simply based on the level of activity that’s expected by online advertisers.

When you’re calculating how effective your CPM strategy is, it’s worth considering the seasonality of your campaigns. If you’re comparing your number of ad impressions received over a certain period of time, make sure you have a similar benchmark to work with.

How to Use Our CPM Calculator

If you’ve used one of the other calculators we offer on this website, this tool should be no different. You can use our CPM calculator to plan how much you’re going to spend on your digital marketing budget, and even examine how your ad spend differs from one channel to the next. For instance, consider comparing your average CPM on a social media channel like Facebook, to the cost of a campaign launched on the Google Search engines.

Simply enter the details into the form fields provided, and click the Calculate button to get your total CPM. We recommend checking the cost of your marketing campaign a few times to make sure you’re getting an accurate insight for your total budget.

Once you have your CPM, you can use it alongside various other KPIs or metrics commonly used to assess the value of an online marketing strategy. For instance, you might compare your CPM to your CPC (Cost per Click) to determine how many of the total number of impressions you’re receiving are actually converting into engaged customers.

CPM FAQs

Is CPM advertising valuable?

CPM advertising can be a cost-effective way to increase your brand reach and improve your visibility with a specific audience. You can use a CPM campaign in your online advertising strategy to strengthen your chances of attracting new customers, and increase brand awareness.

How much of an advertising budget should be dedicated to CPM?

There’s no one-size-fits-all way to determining the right CPM marketing budget. Depending on where you choose to advertise, CPM promotion can be relatively inexpensive. Just make sure you’re choosing the most relevant locations for your ad. This will help to ensure your ads are improving user experience for your customers, rather than just being distracting.

How do I start a CPM marketing campaign?

Launching a CPM marketing campaign means pursuing partnerships with either search engine advertising platforms, or social media platforms. There are also some marketing companies which will specifically offer advertising campaigns on a CPM budget basis. Make sure you know your budget before you get started, and have a clear idea of the target audience you want to reach.

It’s also worth making sure your CPM strategy aligns with any other marketing strategies you might be using, such as advertising on LinkedIn, or using content to increase SEO.