Do you work in marketing or own a business?
Then you probably already know the importance of digital marketing for a company’s success. You can reach millions of potential customers with a few clicks and turn them into buyers for your products.
But how do you measure the effectiveness of your ads?
We have created a downloadable CPM calculator which will help you calculate your CPM and give you a better overview of your advertisement campaigns.
What is CPM?
CPM (cost per mille) shows you the price you would have to pay for 1000 impressions.
This advertising model is often used by people who run ads in bulk and in different combinations, to be aware of their advertisement costs.
By knowing the exact cost you would need to pay for 1000 impressions, you can maximize the effectiveness of your ads by finding ways to lower the average bid.
Why You Need A CPM Calculator.
When you know how to calculate your CPM, you know exactly how many impressions your ads receive and at which cost.
As a result, you will not only improve your brand’s exposure but also get a detailed overview of the impressions on each of your advertisement platforms.
You will know which platforms perform better than others, and adjust your strategy accordingly. If one channel performs poorly, you can focus more on the ones that perform better.
Calculate your CPM in order to:
- Analyze and measure the effectiveness of your campaigns
- Discover whether the amount you spend per 1000 impressions is high or low.
- Know how much you’d spend if you were to increase your impressions.
- Maximize the output of your marketing budget by optimizing your ad placement.
How to Calculate CPM?
There are different metrics that you need to take into account, depending on the channels you are using to attract new users or retain the old ones.
So, down below, we will explain the process of calculating CPM for your marketing campaigns.
How to Calculate CPM for Facebook Ad Campaigns?
Calculating CPM for your ads of Facebook is fairly straightforward. This is because you can see the estimated reach of your campaigns before you even start them.
In the case of Facebook, the CPM metric measures the total amount spent on an ad campaign, divided by impressions, multiplied by 1,000 (Cost per mille).
For example, If you spent $50 for an ad campaign and receive 10,000 impressions, your CPM was $5.
How to Calculate CPM for AdWords Campaigns?
Similarly to Facebook campaigns, CPM is calculated by dividing the total cost of your ads by the number of impressions they receive and multiplying the result by 1000.
For example, suppose you allocate an amount of money for a PPC campaign where you will have to pay $0.05 per click. Since you pay per impression, you can easily calculate that 1000 impressions will cost you $50 USD.
If you are running a PPC campaign for multiple keywords, you could either calculate the CPM separately per keyword or do the same for the total, as an average cost.
The way to do this is by calculating the average CPC for the given campaign (for all the containing ads) and multiply it by 1000.
How to Calculate CPM for Email Marketing Campaigns?
With Facebook and Google, you pretty much know what rates you should be looking at and what the cost per acquisition should be.
However, with email marketing, things are different. Understanding how much it will cost you to receive 1000 impressions is not always easy.
The way email marketing campaign costs are set is by CPM, or per 1000 readers on your list.
This means that a campaign for 10,000 subscribers, that costs your $250 to create, will result in a $25 CPM. However, sending the same campaign to 100,000 subscribers immediately drops the campaign’s CPM to $2,5.
So, what is a good CPM for email marketing?
In general terms, we have observed that advertisers like to remain under a $30 CPM for their email campaigns.
Of course, the price will always differ depending on the list. In order to spend $30 and receive 1000 impressions, you’ll likely need a niche email list with good open rates and click rates.
Email campaigns that are sent out to lists with a more general audience (e.g. rented lists) will have a lower open rate and target CPM.
For that reason, if we can give an example, your CPM is likely to be more expensive if you send an email to a rented email list rather than a list of your own.
Readers are more prone to read and click through on emails of authors they know and trust rather than advertisements.