Ad ROI CalculatorHow to calculate CPM
CPM = Ad spend ÷ Impressions × 1,000CPM is the cost of 1,000 ad impressions. If you spent 500 and your ads were shown 100,000 times, CPM = 500 ÷ 100,000 × 1,000 = 5.
Work it the other way
| You know | You want | Formula |
|---|---|---|
| Budget and CPM | Impressions | Budget ÷ CPM × 1,000 |
| Impressions and CPM | Budget | CPM × impressions ÷ 1,000 |
| CPM and CTR | CPC | CPM ÷ (CTR × 1,000) |
| CPC and CTR | CPM | CPC × CTR × 1,000 |
Example: a placement sells at a CPM of 5 and you need 300,000 impressions. The budget is 5 × 300,000 ÷ 1,000 = 1,500. If 1.5% of viewers click, you get 4,500 clicks, and each click costs 5 ÷ (0.015 × 1,000) ≈ 0.33.
CPM or CPC: which tells you more?
CPM shows what attention costs. CPC shows what a visit costs. The two are linked through CTR. A cheap CPM with a weak CTR can end up as an expensive click. To compare placements, bring both to the same metric: cost per click, or better, cost per sale. The ad budget calculator follows that chain all the way to sales.
FAQ
How do you calculate CPM?
Divide the ad spend by the number of impressions and multiply by 1,000. 500 spent on 100,000 impressions is a CPM of 500 ÷ 100,000 × 1,000 = 5.
How many impressions will my budget buy?
Divide the budget by the CPM and multiply by 1,000. A budget of 1,500 at a CPM of 5 buys 1,500 ÷ 5 × 1,000 = 300,000 impressions.
How do I convert CPM to CPC?
CPC = CPM ÷ (CTR × 1,000). With a CPM of 5 and a CTR of 1.5%, CPC = 5 ÷ 15 ≈ 0.33.
What does the M in CPM stand for?
M is the Roman numeral for 1,000. CPM means cost per mille: the price of one thousand ad impressions.