Effective CPM Calculator

Electronic promotions and advertisements have become very popular due to growing social media presence and modernization of old systems in almost all the industries. Using online advertising is an effective way of reaching the common man now a days. Most of the big companies as well as small businesses use online advertising and effective CPM is a measure that is used for managing digital marketing functions.

Effective CPM Calculator
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Effective CPM Calculator Results
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Effective CPM defines the effectiveness of your digital marketing campaign

Effective CPM Calculator. This image provides details of how to calculate CPM using a calculator and notepad. By using the Effective CPM formula, the Effective CPM Calculator provides a true calculation of the performance of ad campaigns on the basis of revenue generated by them per thousand views

Effective CPM stands for effective cost per mille (mille being roman symbol for thousand) that measures the effectiveness of a digital marketing campaign, also this is used to compare the profitability of campaigns that have different pricing models. Let's have a look at the definition of effective CPM and the way it is calculated.

Defining effective CPM and calculation method

Effective CPM of effective cost per thousand (ECPT) as the name suggests, is a method used by the publishers of the ad campaigns. This measures the performance of ad campaigns on the basis of revenue generated by them per thousand views. This is calculated by dividing the revenue generated by an ad campaign by the number of impressions generated and then multiplying it by a thousand.

Effective CPM = (Total ad revenue / total number of ad impressions) x 1000

This can be better understood by an example: Let's assume you had bought an ad campaign that have generated the revenue of $50 with the total ad impressions of 10,000. This will result in the effective CPM of $50 which means that $5 has been generated per thousand ad impressions. This is the ways to perform the calculations manually, however, just in case you want to use the easier method, you may use the online effective CPM calculator designed by iCalculator. Let's see how to use the calculator and its benefits.

Using the calculator to determine your effective CPM

The effective CPM calculator is easy to use that reduces your efforts of manual calculations to just a few inputs and clicks. The calculator has the following fields that you have to fill in order to get the results:

  • Project Revenue: Enter the revenue that has been generated from the project in question.
  • Valid page impressions: This refers to the number of valid impressions that can be considered were actual revenue generators.

Benefits of using the calculator

On the basis of above inputs the calculator will provide you with the effective CPM value, which denotes the revenue generated per thousand ad impressions.

It is not necessary to have the actual numbers in hand, the estimated numbers or the numbers that are offered by the advertiser can be entered.

The calculations become quite complex with huge projects, but the calculator will be able to perform these calculations for you.

The results can be used to compare the effectiveness of different ad campaigns, also, services from different service providers can be compared for profitability. However, effective CPM is not to be confused with CPM, both are calculated in a similar manner, but have different motives, let's see how they are different from each other.

Effective CPM VS CPM

The method of calculating CPM and effective CPM is similar but they both serve different purposes. Effective CPM is used to measure revenue per thousand impressions, whereas CPM is a measure of the cost of buying the advertising per thousand impressions.

  1. CPM helps you cost the ad campaign and Effective CPM measures whether you got what you were expecting from that same ad campaign.
  2. Using the above example as it is, will bring the same results which will make your CPM is same as your effective CPM. This may be defined as meeting the expected effectiveness of the campaign.
  3. The CPM method has been in use for many years since it is used in print media as well as online marketing, whereas effective CPM is used exclusively in digital advertising.
  4. Theoretically speaking effective CPM is considered to be superior metric when compared to CPM, however, this is true for digital marketing only. When it comes to other forms of marketing, going for CPM metric will be ideal.

Both CPM and effective CPM metrics are useful in their own essence. Effective CPM is the way to go in the web-world, also it helps businesses to better manage their marketing teams.