Formula and Execution

Impressions

How many people’s views the advertisement is called impressions.

Cost per mille

The cost of advertisement per one thousand views is called the cost per mille.

Cost

The total spending on the advertisement is called cost.

Cost Per Mille Calculator (CPM Calculator)

Businesses overgrow around the globe; with the growth of the businesses, their sales level also increases exponentially. The main reason behind the surge in the sales level is their marketing strategies. How they marketize, their product is directly related to the increase or decrease in sales. The Internet revolutionized the marketing strategies and campaigns of the companies. Companies are using different platforms on the Internet to advertise their products. Increased in digital advertisement cost is one of the main problems for the companies. They are using various techniques to control the advertisement cost. At the same time charging for advertisements is the way of earning for different peoples on the Internet. You Tubers, website owners and TV channels, etc. use different methods to levy the company or individual for advertisement charges. One such method is the cost per mille or cost per thousand. Calculating the value of cost per mille is a grueling and tedious task. “Calculatorbeast” have developed different tools to make this challenging task easy and straightforward. One such tool is the cost per mille calculator, also known as the CPM calculator.


Why is the CPM calculator used?

The manual calculation is a tough and time-consuming process. Manual calculations have two fundamental problems. 

  1. There is a chance of error while calculating things manually.
  2. Manual calculations consume your energy and time, so it is a costly process.

To eliminate such hurdles, we use the CPM calculator.


How can it help?

CPM calculator is helpful in many ways such as

  1. It gives you error-free values, subject to the condition that values are correctly put in the CPM calculator.
  2. It calculates things quickly and saves a lot of your time.
  3. Those who don’t know how to calculate cost per mille manually can easily calculate it through the CPM calculator.


To whom will it help?

CAPM calculator is useful for all those who want to find the cost per mille. It is particularly beneficial for the following individuals or entities.

  • Companies: Those companies that are using a third-party platform to advertise their products need a CPM calculator to calculate their advertisement cost.
  • Researchers: Those researchers who are doing researches on online advertisements of the companies. They can also use the CPM calculator to calculate their advertisement cost.
  • Internet users: Those individuals or companies who are providing their platforms for online advertisements need a CPM calculator to calculate their earnings. A cost for an individual or company is an earning for other individuals or companies. 
  • Students: Those students who are doing their assignments on social media marketing of the companies can also use this calculator for CPM calculation. 


Cost Per Mille

Cost per mille is the cost of an advertisement paid for one thousand views of an advertisement. CPM is a very efficient tool to compare the advertisement cost and the sales generated as a result of the advertisement. CPM is useful for businesses in many ways, including:

  • CPM is effective where the purpose of the advertisement is just to deliver a specific message or bring awareness about the specific brand. Through CPM, companies or individuals try to give the message about their product to more and more peoples.
  • Promoting an online business on a highly affiliated website can make CPM useful from sales and branding perspective.
  •  When the ads with a high conversion rate are paired with the right advertising platform, they can be quite effective. The right audience -  for example, a shoe store advertising on a popular shoe blog can make the CPM model works in its favor.

Purpose:

The purpose of CPM is to bring awareness about the brand. And to give a message about the product to as many peoples as possible. The marketing department of different companies search out different TV channels or YouTube channels of YouTubers to find the low-cost CPM and at the same time reach the message about their company product to many peoples. Once the marketers search out the different channels, then they decide the best and financially affordable option for the advertisement of their products.


Steps involved in the Calculation of CPM

There are two steps involved in the calculation of the total cost of advertisement through the CPM calculator. 

  1. Impressions: You need the number of viewers that how many peoples view your ad. Once you find the number of viewers, put that in impressions portion of the CPM calculator.
  2. Cost per mille: You need the value of CPM once you decide the value then put that value in the CPM box of CPM calculator.
  3. Once you put these two values, it gives you the total cost of the advertisement in the cost portion of the CPM calculator. 

Example: The total amount of impressions generated is 3,000,000. The cost per mille is $3. What is the total cost of the advertisement?

Solution:

                   Impression = 3,000,000.

                   CPM = $3

                  Advertisement cost =?

Put these values in the CPM calculator; the following amount of cost is obtained, as shown in the picture.

 

Note: Putting values of the “impressions” and “CPM” is mandatory; otherwise cost portion will show no value.


If the CPM is unknown  

Impressions = 3,000,000.

Cost = $ $8,000

CPM =?

Put the above values in the CPM calculator; it gives you the value of CPM as follows.

If you want to find how many impressions will generate if I spend a particular amount on advertisement like

Advertisement Cost = $8,000

CPM = $2

Impressions =? 

Put the above values in the CPM calculator; it gives you the value of impressions as follows.


Formulas used in the CPM Calculator

Two formula is used in the CPM calculator.

  1. CPM formula: This formula is used to find the advertisement cost per one thousand views of the ad. The formula of CPM is {(Total advertisement cost / impressions)* 1000}.
  2. Cost formula: This formula is used to find the total cost of the advertisement. The formula of advertisement cost is (cost per impression * total impressions). To find the cost per impression, we use the formula (Total advertisement cost/ Impressions).

Example: The total number of impressions on a particular ad is 1,000,000. The total cost of the advertisement is 10,000. Find the cost per mille and cost per impression.

Solution:

               Impressions = 1,000,000.

               Total cost = 10,000.

               CPM =?

CPM = (Total advertisement cost / impression)*1000

         = (10000 / 1000000)* 1000

         CPM= $10

Cost per impression = Total advertisement cost / Impressions.

                                    = 10,000 / 1,000,000

                            Cost per impression       = $ 0.01

Total cost = cost per impression * impressions.

                   = 0.01* 1,000,000.

                    Total cost= $10,000

Solving it manually is a tiresome and challenging task. You can quickly solve it through the CPM calculator as follow.


To find the total cost of advertisement, put the values of impressions and CPM in their respective boxes, the total cost is obtained as follows.

FAQS

1. What Does CPM stand for?

CPM stands for cost per mille. Mille is a Latin word that means a thousand. CPM is also called CPT, i.e., cost per thousand.


2. What does CPM YouTube mean?

CPM stands for cost per mille; in the case of YouTube, it means how many peoples have viewed the specific advertisement on YouTube. You Tuber charged companies and individuals for advertising their products from their YouTube channels.


3. What does CPM Facebook mean?

Facebook also charge you for advertising your product on Facebook. Facebook will charge you based on "how many times your ad is shown to the peoples by Facebook." In the case of CPM, Facebook charges you after every one thousand views of your advertisement.


4. What is a good CPM?

The good CPM is the one where you pay less cost per one thousand views and generate good revenue from those one thousand views. The higher level of sales shows the right advertisement strategies and the effectiveness of the marketing department. Generally, the primary purpose of CPM is not to make a conversion but to aware peoples about the brand.


5. What is a high CPM?

The higher CPM shows that you are paying more amount on every one thousand views of your advertisement. If the conversion level is not satisfactory against every one thousand views, then it means that your advertising campaign is a failure. The marketing department is not working efficiently and effectively, and the advertisement campaign is not clicking.


7. Why is CPM so high?

The reason behind the higher CPM in the case of Facebook ads is that Facebook rates your ads based on the relevance of the ad to the customers. If your ads are not relevant to the targeted audience, it means that your ad is a bad one. Facebook will punish you with the higher CPM and vice versa.


8. How can you improve your CPM?

You can improve your CPM using the following techniques.

  • Target the right audience:  It means that the ads you are posting on Facebook should be relevant to your targeted peoples. The more relevant the ad is to your targeted consumers, the less will be the CPM.
  • Appealing image: Use such pictures of your product, which is attractive. Good quality images of your product play an important role in the relevance of your ad. The images should be such which grab the attention of onlookers. 
  • Add social proof: Social proof means if any celebrity endorses your product or customer review your product. Adding social proof will engage you with your customers. Add social proof where there is an option for extra writing.
  • Runs Ads in the news feed: Newsfeed is the area where the audience gives more attention and devote most of their time in the news feed. If you want to engage the peoples to keep your ads in the news feed area, this will maximize the visibility of your ads. If you put your ads somewhere else, this means that the engagement with the peoples will be less, and the result will be higher CPM.


9. What’s the difference between CPM and CPC?

Cost per mille: The amount you pay to you Tuber or any TV channel per one thousand views of your product on their channels.

Cost per click: The amount you pay to You Tuber or any website owner on per click on your product on their website or channel.


10. What is click-through-rate?

The percentage of peoples who saw your ad and click on it is called click-through rate. For example, 1,000 peoples view your ad, and only three peoples click on it. The click-through rate is 3%.


11. What is CPA?

CPA stands for cost per acquisition. In the case of CPA, companies or individuals only pay money to You Tuber or website owner when peoples make purchases.


12. What's the difference between page views and impressions?

Page view: The number of times a specific page is viewed is called page view.

Impressions: The number of times any part of the page is viewed is called impressions.


13. How do you calculate CPM in excel?

There is no specific function in excel for the calculation of CPM. You can calculate it manually as follow.

  1. Put the value of impressions in any cell of excel. 
  2. Insert the value of advertisement cost in the following cell.
  3. To find CPM, apply the formula of CPM, which is (Advertisement cost / Impressions)*1000 as follows.


Remember: Put “=” before applying any formula in excel.


14. What is the average CPM on each social media platform?

The following are the average CPM of each social media platform.


15. Should I use CPM, CPC, or CPA?

These are three different techniques to reach your customers. Every method has benefits depending on the marketing campaign.

CPM is usually done to increase awareness about the brand. When you aim to convey a detailed message to your customers, then CPM is the best option. CPM is a low-cost campaign, so it is also helpful for those who are on a tight budget.

On the other hand, if you aim to do more than just awareness, than go for CPC or CPA. In the case of CPC and CPA, your end goal is to make a purchase.


16. What are the disadvantages of CPM?

CPM is useful in the sense that it tells you the cost of advertisement per one thousand views, but it has drawbacks too like:

  • It does not tell you how many peoples have click on your ad.
  • It does not tell you about the purchasing made by the customers out of the one thousand views.


17. Why companies calculate CPM?

Companies always seek maximum revenue while the minimum cost. They are using different tools to control the costs of digital marketing without affecting their conversions. They calculate their CPM for the following reasons:

  • To analyze the effectiveness and productivity of the advertisement campaign.
  • To discover whether the amount spent on one thousand views is more or less.
  • To know how much it must spend to reach a particular level of view.
  • Maximize the output of the marketing budget by optimizing your ad placement.


18. Among CPM, CPC, and CPA, which one is less costly?

CPM is less costly because it needs less effort to generate views. Secondly, the purpose of CPM is to bring awareness about the brand; it doesn't go beyond this, so that's why it is less costly. CPC is more expensive than CPM and less costly than the CPA. The purpose of the CPC is to generate as many clicks as possible. Generating clicks need a lot of effort; that’s why it is more costly than CPM. CPA is the most expensive among the three because an advertiser will pay the publisher when the purchase is made. Purchase needs a lot of effort and time; that's why it is more costly among all.


19. Among CPM, CPC, and CPA, which one generates more revenue?

The primary purpose of CPM is to bring awareness among the peoples about the brand by showing it to more and more peoples. The purchase level from such ads is negligible; that's why there is no such revenue from the CPM ads. The main target of CPC and CPA is to generate sales through more and more clicks and acquisitions; that's why the revenues from CPA and CPC ads are more.