CPC vs CPM Calculator - (Formula)

CPC campaigns are an effective and easy to understand method to drive traffic to a webpage. Once you know where to find clicks, however, CPM campaigns can often become a more cost-effective solution. The trick is finding this tipping point where running a CPM campaign will get you the same/more clicks for less money than a CPC campaign.

Our CPC vs CPM tester does just that. Enter the statistics of your campaign below to see if you should switch to a CPM campaign or keep going with a CPC campaign.


CPC vs CPM Tester

Enter your stats in all three of the below boxes - get these stats from your campaign management platform.

Note: I would not recommend consider switching to CPC until you have run at least 10,000 ad impressions, or the results might not be stable yet.

Result It's time to switch!
Test out CPM Advertising
Result Stick with what you know
Use CPC Advertising

What is CPC? In the context of online advertising, CPC stands for "Cost Per Click." It is a metric used in digital marketing to calculate the cost an advertiser pays for each click on their online advertisement. This is how it works.

Definition:

CPC (Cost Per Click) is a pricing strategy in which marketers pay a set amount each time a user clicks on their ad. Advertisers bid on specific keywords or target audiences and the cost is only incurred when a user clicks on the ad and is taken to the advertiser's website or landing page.

What is CPM?In the context of online advertising, CPM stands for "Cost Per Mille" or "Cost Per Thousand." CPM is a popular metric for calculating the cost of 1,000 impressions of an advertisement. An impression is recorded whenever an ad is displayed to a user, regardless of whether the user interacts with it.
Here's a breakdown of the key elements of CPM:

Definition:

CPM is a pricing strategy in which advertisers pay a set amount for each 1,000 impressions (views) of their advertisement. The name "mille" derives from the Latin word meaning thousand.

How to Calculate CPC?

Calculating Cost Per Click (CPC) involves determining the amount an advertiser pays for each click on their internet advertisement. Here's a step-by-step instruction for calculating CPC:

  • Total cost:

    Calculate the total cost spent on the advertising campaign. This includes all expenses related to running the advertising such as bidding fees, platform fees and any other charges.


  • The number of clicks:

    Determine the total number of clicks generated by the advertising throughout the campaign. This information is often provided by the advertising platform or can be gathered using analytics tools.


  • CPC Formula:

    Use the following formula for calculating CPC:

    CPC = Total Cost / No. of Clicks


  • Example:

    Let's suppose a marketer spent $500 on an online advertising campaign that resulted in 200 clicks. The CPC is calculated as (500/200 = $2.50 per click).

Switch to a CPM campaign if you can pay a lower CPM than your CPC x CTR x10

How to Calculate CPM?

Calculating Cost Per Mille (CPM) involves determining how much an advertiser pays for every 1,000 impressions of their internet advertisement. Here's a step-by-step instruction for calculating CPM:

  • Total cost:

    Calculate the total cost spent on the advertising campaign. This includes all expenses related to running the advertising such as bidding fees, platform fees and any other charges.


  • Number of impressions:

    Determine the total number of impressions generated by the advertisements throughout the campaign. Every time a user sees the ad, an impression is recorded. This information is often provided by the advertising platform or can be gathered using analytics tools.


  • CPM Formula:

    Use the following formula to calculate CPM:

    CPM = Total Cost​ / (Number of Impressions/1000)


  • Example:

    Let's say a marketer spent $2,000 on an online advertising campaign that resulted in 500,000 impressions. The cost-per-impression (CPM) is calculated as 2000 / (500,000/1000) = $4.

Why CPC Calculator is important?A CPC (Cost Per Click) Calculator plays an important role in online advertising because it helps advertisers in managing their budgets, measuring cost-effectiveness and optimizing their strategies. By estimating the cost of each click, advertisers can compare campaign effectiveness, assess ROI and make appropriate adjustments. This promotes open communication, directs resource allocation and encourages constant advancement in advertising efforts which ensures that advertisers can meet their objectives within budget and efficiently respond to market dynamics.

Why CPM Calculator is important?A CPM (Cost Per Mille) Calculator is useful in internet advertising as it calculates the cost per thousand impressions which allows advertisers to assess the cost of reaching a specific audience. CPM allows advertisers to analyze the cost-effectiveness of brand exposure programs. This tool supports budget management, performance comparison and strategic decision-making that allows marketers to maximize their efforts for greater visibility and reach while staying within financial limits.

Difference Between CPC and CPMCPC (Cost Per Click) and CPM (Cost Per Mille) are online advertising models. CPC charges advertisers per click which emphasizes user interaction whereas CPM charges per thousand impressions which focuses on visibility. CPC is appropriate for performance-based goals because advertisers pay for actual clicks. CPM is suitable for brand exposure programs that charge according to potential reach. Advertisers must make a decision based on campaign objectives such as whether to prioritize user interaction (CPC) or broad audience awareness (CPM).