For example, let’s say that your goal is for your website to generate $5,000 of ad revenue.
If on average, your site generates $4 per 1,000 page impressions from all of the ads on your site.
Plugging all of this data into this calculator, you can see that you will need 1.25 million views to reach your $5,000 revenue goal.
If an average user visits 3.2 pages, then you need a little over 390,000 visits.
Note, this calculation only looks at the total for all banner ads on the page, not the revenue per each banner ad impression.
CPC means “cost per click”, so the formula for it is as follows:
CPC = total_cost / number_of_clicks.
You may also caluclate it from CPM and CTR:
CPC = (CPM / 1000) / (CTR / 100) = 0.1 * CPM / CTR.
When buying CPC ads placement in a real-time bidding auction, special algorithms look at many variables and will submit a CPM bid in an attempt to drive towards a specific CPC. Some factors include the ads performance so far, what is known about the user, and historic CPMs for the ad placement. All of this information is taken into account as the algorithms try to predict CPM and CPC for every impression.
Click Through Rate is a simple percentage formula:
CTR = 0.01 * number_of_clicks / number_of_impressions
As a publisher, it can be difficult to decide between selling advertising space on a CPM or CPC basis. CPC is more closely tied to the value that the traffic brings to the advertiser, while CPM is more predictable for the publisher.
Some advertisers however, do not measure clicks or page visits at all and use display advertising purely as a way to increase brand awareness.