The CPC & CPM Calculator is used to calculate the CPC (cost-per-click) based on CPM (cost per 1,000 impressions) and CTR (click-through rate). Also, the calculator allows you to calculate CPM or CTR based on the other two values.
This is a tool for people who buy or sell digital media and online traffic.
Here are a few tips to get started.
CPC and CPM are the two most common models of billing for internet advertising. With CPM, advertisers pay based on how often their ad is shown to users.
For example, when you buy 10,000 visits with a $2 CPM, you’d end up paying $20 for the whole campaign.
With CPC advertising, advertisers pay for actual visits to their site.
For example, you may agree on $1.50 CPC and this is how much will be paid for every single click.
Once the campaign starts and you see how the ads perform, you can easily calculate CPM from CPC and CPC from CPM via another metric called CTR (click-through rate), which simply means “how often do people click on my ads”.
If you’re on the buyer’s side and would like to calculate everything else that goes into the media planning process (from impressions, through clicks/visits, leads to actual sales), check out our conversion & ROI calculator. Also, we have a simple CPM calculator if branding and reach is the goal instead of clicks or visits.
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.