This CPM calculator uses big.js for extra precision and the ability to calculate extremely high impression counts with out displaying numbers in scientific notation.
It was tested up to 1 googol (1e+100) of impressions and it will continue to calculate impression counts beyond that, but the number will be displayed as an exponential number.
How To Use This Calculator:
Fill out any two values and this calculator will calculate which ever value is missing.
This calculator will properly handle dollar signs and commas, but not symbols like the € symbol, so make sure that if you are using currency values, that you eliminate the symbol that indicates the currency.
How To Calculate CPM
There are three important numbers to understand when trying to calculate CPM.
Campaign Cost: This is total cost of the campaign, but can also be the monthly advertising budget.
Cost Per CPM: This is the cost for 1,000 advertisement impressions and is either referred to as CPM, cost per mille, or cost per thousand. These terms all mean the same thing.
Number of Impressions: This is exact number of impressions that the ad was shown but doesn’t actually represent the amount of times a person saw the ad. It’s possible that the ad could have been displayed in a position outside of the user’s view-port. Some advertisers prefer to purchase ads based upon viewable impressions, and it’s important not to mix these two numbers together when doing this calculation.
There are three separate formulas for determining the remaining value based upon which ever two data points you have.
Number of Impressions = Campaign Cost / Cost Per CPM * 1000
Cost Per CPM = Number of Impressions / Campaign Cost / 1000
Campaign Cost = Number of Impressions / 1000 * Cost Per CPM
Why CPM is Important in Online Advertising
When testing out different advertising platforms to purchase display advertising, it’s important to be able to have a way to compare the media cost across the different advertising platforms and individual advertisers.
Being able to compare costs and having a way to track the revenue these campaigns are generating is critical to optimizing display advertising campaigns.
Having the ability to identify productive campaigns while being able to eliminate poorly performing campaigns is required to maximize the return on advertising spend.
What’s more Important, CPM or ROI?
At the end of the day with any advertising campaign, all that matters for most brands is their ROI.
Trying to focus on reducing CPM can result in campaigns where the ad is only being displayed on placements that are low quality or the ad impression is unlikely to generate a sale.
Because the online advertising ecosystem is extremely competitive and new technology like programmatic advertising is now available, it is critical to understand that the effectiveness of a campaign is far more important than the cost per one thousand impressions.