Internet Marketing

5 Second CPM Calculator

If you’re a marketer or a business owner, you know the importance of digital marketing. It’s an effective way to reach millions of people and can lead to tons of new leads and revenue. But how can you tell if your digital marketing campaign is cost-effective? If you’re using CPM advertising, our CPM calculator can help.

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What is CPM in advertising?

CPM is an important advertising term in the world of a marketer. CPM in advertising allows you to see how much 1000 advertisement views, or impressions, would cost.

An easy way to understand CPM is by putting it in context. For example, if a website's CPM charge is $5.00, that means that you, as the advertiser, would be paying that $5.00 every 1000 times your ad was seen.

After all, CPM stands for "cost per thousand impressions"!

If you're not satisfied with your CPM, WebFX can help. We have a team of over 200 specialists that can help you create a digital marketing campaign that is both successful and cost-effective. Our tried-and-true methods have created over 3 million leads, so we must be doing something right!

Why is calculating CPM important?

Marketing your business is a crucial part of your success. Without Internet marketing, it's unlikely that your website will see the traffic it needs to rank well in search engines. It's a domino effect, and if your website isn't getting traffic, you're likely not making many sales either.

When you calculate your CPM, you're doing yourself and your business a favor by not only increasing brand awareness, but also measuring the impressions of each of your ad platforms. If you find that you're not getting as many impressions as you'd expect on a certain platform, you'll be able to shift your strategy in order to improve that number. This ultimately results in higher brand awareness and more conversions overall.

CPM gives you valuable insight that can truly shift and shape the course of your marketing campaigns.

Visualize how far your advertising budget is taking you

One of the biggest advantages of online campaigns is how easy they are to analyze and measure. With the right data, it’s easy to see just how far your advertising budget is taking you and the results your campaign is yielding.

If you enter impressions and total budget in the calculator, you’ll get your CPM. By calculating CPM, or the price you pay for 1000 ad impressions, you can decide whether or not the amount you’re paying is cost-effective for your business. Low CPM means that your ad is being displayed to Internet users at a relatively low cost, while a high CPM means that you’re paying more per view.

you can decide if your campaign is cost effective

If you already know the CPM for an ad, and enter it along with the total number of impressions you want, you’ll see how much that would cost you.

If you enter CPM along with your total budget, you’ll see the number of impressions you’d be able to have with that budget.

Now that you know the impressions, budget, and CPM of your campaign, you can make more informed decisions about your digital marketing strategy.

How do you calculate CPM?

CPM, or cost per thousand, refers to the cost of a marketing campaign that reaches at least 1000 people. The letter "M" in the term refers to the Roman numeral for 1000.

In order to calculate your CPM, there are a few crucial pieces of information that you need.

  • First, you will need to determine how many impressions your ad will receive, or how many times your ad will be viewed. You will also need to determine the price of the ad.
  • cpm, or cost per thousand
  • You will then need to divide your total number of impressions, or ad views, by 1000. For example, if your ad is viewed 30,000 times, when you divide that number by 1000, the result is 30.
  • You will then need to divide the cost of your ad, determined in the first step, by the number you calculated by dividing your ad views by 1000 in the second step, to end up with your CPM value.
  • In short, the formula for calculating your CPM is ad cost divided by the result of dividing your impressions by 1000.

    Understanding CPM

    Now that you've been informed on how to calculate your "cost per 1000 impressions," it's important to understand the term CPM in general.

    CPM, like its name suggests, allows internet marketers to obtain a quantitative figure of how much it costs for 1000 impressions. To date, CPM is the most common technique used by marketers to assess the price of a web ad.

    What is the average CPM on each social platform?

    You can utilize CPM as a strategy on Facebook, Instagram, YouTube, LinkedIn, Twitter, and Pinterest.

    Check out the average CPM advertising cost on each of these platforms in the table below:

    Average CPM Advertising Cost Per Platform
    Social Media Platform Average Advertising Cost (CPM)
    Facebook $7.19 per 1000 impressions
    Instagram $7.91 per 1000 impressions
    YouTube $9.68 per 1000 impressions
    LinkedIn $6.59 per 1000 impressions
    Twitter $6.46 per 1000 impressions
    Pinterest $30 per 1000 impressions

    What's the difference between CPC, CPM, and CPA?

    Similar to CPM, CPC and CPA also exist and serve as other ways of pricing ads. CPC or PPC, both meaning cost per click, requires the promoter of a specific ad to pay each time the ad receives a click.

    • CPC

      CPC, or cost per click, is very similar to CPM. However, with CPC, you pay for every time someone takes action and clicks on one of your ads. This is extremely useful when you're promoting an ultra-specific product or service in a niche market.

    • CPA

      CPA, or cost per acquisition, is when the promoter of the ad only has to pay when a purchase is made that can be tracked back to the buyer clicking on the ad that resulted in that purchase.

      If you're going to utilize CPC or CPA, it's important to have a high click-through rate since the goal of the ads is to ultimately have someone purchase the product that you're advertising.

    • CPM

      With CPM on the other hand, you only pay per 1000 impressions. Impressions essentially refer to how many people see your ad. They don't have to take action (like clicking the ad) to be considered an impression.

      Click-through rate is less important with CPM since you're not as worried about driving conversions as you are increasing brand awareness. This makes CPM rates extremely low and cost-effective.

    Should I use CPM, CPA, or CPC?

    As with every aspect of marketing, different techniques will be successful depending on the campaign type.

    CPM often makes the most sense if your company is driven toward increasing awareness for your brand. It is also extremely helpful when your campaign is aiming to convey a detail-oriented message to your customers. It's less focused on clicks and can be low in cost, making it great for low budgets.

    On the other hand, CPC and CPA stand out as a fantastic choice if you are using digital advertising. If you're focused on doing more than just making an impression on users and your end goal is a purchase, one of these options is the way to go.

    Maximize your budget with PPC ads

    If the CPM of your ad campaign is too high to be worth the investment, or if you just aren’t seeing results, PPC might be a better option.

    With pay per click advertising, or PPC, you only pay for ads when people actually click on them. That way, if someone sees your ad and isn’t interested, you haven’t lost anything. If you use search engines, you’ve most likely seen PPC ads before. In Google, for example, they can appear both at the top of the results and in a sidebar next to the results:

    PPC example

     

    In this screenshot, every single result shown is actually a PPC ad. This means that if you were to click on any of them, the site owner would have to pay Google.

    So how does Google (along with other search engines) decide who to show these ads to? When advertisers create PPC campaigns, they choose a set of keywords they want to be listed for. In the example above, all of the ads shown are for businesses that wanted to reach people who searched for “web design.”

    broad keywords are harder to rank for

    All PPC ads are not priced the same, though. The cost for each click is determined by an auction process, and each advertiser has to set a bid for the maximum amount they are willing to pay per click for specific keywords.

    This means that broad keywords like “web design,” which a lot of companies will want to compete for, are more expensive than specific ones like “web design companies in central Pennsylvania.” The fewer bidders a keyword has, the less you will pay to advertise in its search results.

    For many businesses, PPC allows them to maximize their marketing budget.

    Ready to improve your online ads?

    Although it can take some trial and error to figure out which keywords work best for your site, PPC can be a much more cost-effective pricing model for your digital advertising efforts than CPM.

    WebFX offers a variety of PPC campaign plans to fit any budget. Our customized campaigns vary in PPC spend, number of keywords, and setup fees, and there is always room for customization.

    If you’re interested in learning more about PPC, or want help setting up a campaign, feel free to contact us! We’re more than happy to help you start maximizing your Internet marketing potential.

    Ready to start an Internet marketing campaign? Call 888.449.3239 or contact us online today to learn more about how WebFX can help with your SEO challenges.