CPM calculator, CPM meaning and CPM formula
What is a CPM? CPM stands for Cost Per Mille
To calculate CPM, you will need the following metrics:
2. Ad spend / budget / revenue
In programmatic campaigns (using a DSP or a self-serve platform such as Facebook's or LinkedIn's), the CPM of your media may be variable. This is referred to as eCPM (or the effective CPM).
As these ads will be bought in real-time, using a bidding model rather than agreeing with a publisher up-front on a fixed price, you will have to monitor the CPMs to ensure your campaign is not becoming inefficient.
A reason for an increase in CPM may be based on more competition coming into the market bidding for the same impressions. A classic example of this is around key holiday periods, such as Christmas. CPMs usually increase dramatically, even for exactly the same formats and targeting you were buying weeks before.
A buyer or trader may wish to manually increase the CPM to ensure they are winning enough bids for the impressions they want. For example, if you wanted to increase the campaign's viewability, you would have to increase your bid to ensure you are winning more bids for impressions that are more likely to be served in-view. The same can be said for performance campaigns, whereby you may want to pay more for additional data that may improve your conversion rate or lower your CPA.
CPM vs CPC
The buying metric you should use will be determined by the goal and objectives of your digital advertising campaign.
CPM: if you are running a brand campaign, we would recommend to use CPM as you will be able to be more targeted in the ads that are served and will know how much of your target audience you have reached.
CPC: should be used if you want a fixed number of users to click a link. This is typically used in performance campaigns if your goal is to increase site traffic. This means you only pay for the action you want the user to make.