Calculating the metrics

While terms like CPM, CPC or CPA might be considered as different methods of buying, they are also valuable metrics you could calculate for comparison of different ad material, ad campaigns or ad placements. Strictly speaking, we are now in the field of the eCPM, eCPC and the eCPA, although the terms are interchangeable (CPM almost equals eCPM for instance).

There are many different methods of calculating the same metrics. Here are two different formulas for calculating CPM (or eCPM if you'd like), which will give the same result:

CPM = Cost x 1000

CPM = Cost
( Impressions )

In my opinion the first formula is the easiest to grasp.

CPM could also be calculated based on Cost Per Click and Click-Through Rate (now you actually got the eCPM for a CPC campaign, ref. buying methods):

CPM = Cost Per Click x Click-Through Rate x 1000

There is a endless number of methods for calculating metrics that will be suitable for some kind of comparison, it's all a matter of mathematics. The most important thing is that you are consistent in what calculation methods you are using.

Find the calculation method that suits your needs best, and stick to that method for future comparisons.

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