There are metrics that we can use in digital marketing to evaluate the results of advertising campaigns. One of these metrics is the CPM. In this post, you will read how to calculate it and why you need a CPM calculator.
CPM stands for cost per mile. It shows the price you need to pay for every 1000 impressions of your ads.
An impression is one view of your ad in advertising programs. Usually, digital marketers need this metric on paid advertising. CPM is vital for advertisers that want to maximize their impressions and estimate their budget.
A CPM calculator helps you know how much money you need to invest for 1000 impressions. Then, you can adjust your strategy and your budget to reach your goals.
Each platform has a different CPM, so you can figure out which platforms are the best option for your campaigns. When the calculator shows a high CPM, you can expect poor performance from your ads or a lot of competition. A CPM calculator can also estimate the number of impressions you will receive and the total cost of a campaign.
We need to consider different metrics on each advertising program to find the exact CPM. You can read some examples below. However, the CPM formula that you can use in every case is the following:
CPM = (cost to the advertiser / number of impressions) * 1000
These were some uses of CPM. However, you will save time if you use a CPM calculator instead of doing the maths by yourself. It's a number that will help you evaluate your marketing campaigns, so you will need to calculate over and over again.
According to the CPM formula, you divide your ad's total cost by the number of impressions and multiply your result by 1000.
For example, if you create a Google Ads campaign with a cost per click of $0.10, your CPM is $100. This is the budget you need to get 1000 impressions.
If you run Google Ads campaigns with multiple keywords, you can estimate the average CPC and do the same process. Another alternative could be to calculate the CPM on each keyword first and then find the average CPM.
It is easier to calculate CPM for Facebook. When you create a new ad, it shows you an estimation of the people you will reach based on your budget.
For example, if you set a $100 budget and the estimation is to reach 10,000 people on the platform, the CPM for your ads is $10. You can then adjust your priorities and the available options to reach more people or improve CPM.
Based on the CPM formula, we can find the numbers of the impressions if we know the metrics for CPM and cost to the advertiser: Impressions = (cost to the advertiser / CPM) * 1000