How to Calculate CPM

Three Methods:Calculating CPM ManuallyCalculating CPM with an Online CalculatorPutting it to use

CPM is an advertising term that represents the cost of one thousand ad impressions. One impression is simply a website requesting an ad unit from an ad server. It does not account for scenarios where the ad didn’t fully load or wasn’t within viewable space on the page (below the fold). Ad networks typically offer specific CPM rates or there is a bidding system in place. Calculating CPM is good practice and can be used to project the total cost of an ad campaign, or how many impressions can be purchased with a specific budget.

Method 1
Calculating CPM Manually

  1. 1
    Determine the total number of impressions. To calculate the costs of an ad campaign, the desired number of total impressions needs to be set. [1]
    • Example; company ABC321 wants to run a campaign that will get 500,000 impressions.
  2. 2
    Know the CPM rate. This is the rate an ad network charges for 1000 ad impressions.
    • Example; 987Adz currently has a CPM rate of $20. That is, $20 for 1000 impressions.
  3. 3
    Do the math. Calculate CPM for the marketing campaign by plugging the above data into the following formula.
    • CPM = Total number of impressions × CPM rate ÷ 1000
    • 500,000 × $20 ÷ 1000 = $10,000. CompanyABC321 will spend $10,000 on this marketing campaign and will receive 500,000 impressions.

Method 2
Calculating CPM with an Online Calculator

  1. 1
    Choose a CPM Calculator. Search online for a CPM calculator or use one of the two provided below.
  2. 2
    Plug-in your data. Enter either your budget and CPM rate or the total impressions and CPM rate into a CPM calculator of your choosing.
    • Hit “Calculate” or “Solve” to get the missing piece of data.
    • Only two of the three data fields needs to be filled for any online CPM calculator. The third will be solved by the calculator.

Method 3
Putting it to use

  1. 1
    Generate Awareness. Use the CPM pricing model to create brand awareness for your business, products, and services.
  2. 2
    Maximize your total impressions while minimizing the rate. Many ad networks offer rate discounts to advertisers who have good quality scores and Click-through-rates (CTR).
  3. 3
    Test your ad potential. CPM is relevant in marketing campaigns that aim to test the potential success of an ad strategy or creative. Before spending large amounts of money on advertising, it’s critical to have some valuable data regarding ad copy and associated creatives.


  • Whether calculating how many impressions you will receive with a predetermined budget or how much an ad campaign will cost, both of the above methods will work.
  • It’s important to understand the difference between a “served impression” (CPM) and a “viewed impression” vCPM. Although the industry is shifting, the current standard is “served impressions”. This is when an ad is requested by a website to be displayed and is counted. Again this does not always mean someone will actually see the ad due to a few factors. For example; the ad unit doesn’t fully load before the user leaves the page or the placement of the ad is out of view for the user (at the bottom of the page). A viewed impression is when an ad is requested, displayed, and is within view to the user.
  • It is recommended to opt for viewed impressions when available. This is a far more accurate way to determine the performance of an advertising campaign. [2]
  • Remember to not confuse CPM with RPM. RPM is “Revenue per thousand” or 1000 impressions. This is typically a rate given to publishers or content creators. It represents how much revenue is generated per a thousand impressions. [3]
  • CPM rates may differ based on the price of certain keywords. Most Ad networks that utilize a bidding system, allow users to bid on keywords - the higher the competition, the higher the price for said keywords.

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Categories: Business