Fill in any two of budget, CPM and impressions, and the third works itself out. Add a click-through rate and you get clicks and cost per click too. Nothing to sign up for and nothing to download.
Why all three fields are live
Most CPM calculators make you choose a direction before you start. Budget in, impressions out, and the other way round lives on a different page.
That is not how planning actually goes. You know two of the three numbers and you want the third, and which two you know changes by the hour. In the morning you have a budget and a rate card. By the afternoon a client has asked for two million impressions and you need to know what that costs. Here you just type what you know and the remaining field fills in.
What CPM means
Cost per mille, from the Latin for thousand. It is what you pay for a thousand ad impressions, and an impression is one ad loading on one screen.
The arithmetic:
- Impressions = budget ÷ CPM × 1,000
- Budget = impressions ÷ 1,000 × CPM
- CPM = budget ÷ impressions × 1,000
So €5,000 at a €2.50 CPM buys two million impressions. The thousand is the only part people get wrong, and it is usually a factor-of-a-thousand error in the answer, which is at least easy to spot.
Impressions are not people
The number this calculator gives you is impressions, not humans. Those are very different and confusing them is the single most common planning mistake.
If your campaign serves two million impressions and the average person sees the ad four times, you have reached 500,000 people. The ratio is called frequency, and it rises as your targeting narrows. Pick a tight audience in one city and the same few people see your ad over and over, which is why a small geography with a large budget often produces an expensive campaign that nobody new ever sees.
The reach figure above assumes a frequency of four, which is a reasonable planning default for a short display campaign. For anything you are actually buying, model it properly.
What a reasonable CPM looks like
Broad European ranges, to sanity-check a quote rather than to hold anyone to:
| Format | Typical CPM | Why |
|---|---|---|
| Display banners | €1 to €4 | Enormous supply. Central Europe sits at the bottom, Germany and the UK near the top |
| Online video | €6 to €15 | Scarcer inventory and far higher attention than a banner |
| Connected TV | €15 to €30 | Full screen, unskippable, and competing with television money |
| Digital out of home | €5 to €12 | Priced on estimated passers-by rather than cookies |
Anything far below these ranges is worth questioning. Very cheap display inventory is cheap because nobody wants it: made-for-advertising sites, hidden placements, or traffic that is not human. A €0.30 CPM is not a bargain, it is a warning.
CPM, CPC and CPA
Three ways of describing the same spend, measured at different points:
- CPM is what you pay to be seen. The only one you control directly when buying programmatically
- CPC is what each click cost. It falls out of your CPM and your click-through rate, so you influence it rather than set it
- CPA is what each sale or sign-up cost. Depends on your landing page and your product as much as on the media
A low CPM with a terrible CTR gives you a worse CPC than a high CPM against the right audience. Buying on CPM alone is how people end up with very cheap impressions nobody saw.
Three mistakes worth avoiding
- Treating impressions as reach. Covered above, and it is the one that makes campaigns look bigger than they are
- Planning a CTR you have never achieved. Display click-through runs roughly 0.05% to 0.10%. If your plan assumes 1%, your click forecast is ten times too optimistic and every number downstream is wrong
- Forgetting the fee. Some platforms quote the media CPM and add a percentage at invoice time. Ask whether the number you have been given is what leaves your bank account
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