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Tuesday, December 31, 2013

Basic Formulas in Online Advertising : CPM CALCULATION

CPM CALCULATION

cost per mille (1000) – This is one of the most used metrics on the web. It is the cost that has to be paid by an advertiser  for serving 1000 impressions .

Example :In a campaign , say an Ad of 728×90 is running and the CPM set is $5 and the impressions to be served is 2,00,000 , what will be the actual cost to  the advertiser ?

The formula for CPM goes this way :

Cost to an Advertiser = CPM x (Impressions / 1000)

using the above metrics :

Cost to an Advertiser= 5 x (2,00,000/1000) = 1000

So , $ 1000 is what the advertiser has to pay !

When CPM needs to be calculated : use the final cost.

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