CPM can help determine if your ad money is being spent wisely.
CPM is a marketing term short for "cost per thousand." It is a way of measuring the rate of return for advertising money you spend on the Internet. It will help you find out how much you are paying for every 1,000 people that see the ad online. Calculating the CPM of a particular ad involves taking the total cost of the ad and dividing it by the total number of "impressions" that advertisement can receive.
Instructions
1. Find the total dollar amount the advertisement will cost you. This dollar amount should be decided upon ahead of time with either the administrator of the site that is running your ad or with the service you are placing the ad through (whichever applicable).
2. Determine the total number of impressions (also called "hits" or "page views") that the page that contains your advertisement can receive. This information can be obtained from the administrator of the site that the ad is running on. You can also find this information through the company you used to place the advertisement (if applicable). Typically this will be one set number that doesn't change month-to-month. This is called a "cap."
3. Divide the total amount of money you spent on the ad by the total number of hits the ad will receive to find the CPM of that particular ad. For example, if it cost you $500 to place the ad and it can be viewed by 100,000 people, $500 divided by 100,000 equals a CPM of 0.005, or $0.50 for every 1,000 views.
