CPM Calculator

Calculating CPM
CPM stands for Cost Per Thousand Impressions and is the industry wide unit used to set pricing for banner ads. If the publisher charges $4.00 CPM, you will be paying .4 cents every time your banner ad is displayed on their website regardless of how many times your banner ad is clicked on. To see what you will pay for each visitor to your site, you would want to measure the Cost Per Click (CPC). If you get a 1% click through rate (CTR), effectively you will get 10 visitors to your site for $4.00 or 40 cents per visitor.

The difference between CPC, CPM, and CPA
The most common method of determining price of a banner ad is in Cost per Thousand Impressions or CPM. For every thousand times your banner ad is displayed, you will be charged x amount of dollars, regardless of how many clicks you receive. CPC or Cost per Click advertising means you will pay a certain price every time your banner ad is clicked on, regardless of how many times it is displayed. CPA or Cost per Action is similar to a revenue share model. In this format, you will not pay for clicks or impressions; rather you will pay each time a certain action is completed, such as a purchase completed. Each method has its pros and cons and each should be investigated when starting a new online advertising campaign.