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CPM vs CPC Calculator

Enter impressions, CPM, CPC, and CTR to compare both ad pricing models.

How it is calculated

You give the number of impressions, the CPM price (cost per 1,000 impressions), the CPC price (cost per click) and the expected click-through rate in percent. The tool computes clicks = impressions × CTR ÷ 100, then the bill under each model: CPM cost = impressions ÷ 1000 × CPM and CPC cost = clicks × CPC. It also converts each model into the other's unit: effective CPC = CPM cost ÷ clicks and effective CPM = CPC cost ÷ impressions × 1000. The difference is CPM cost − CPC cost, so a negative number means the CPM deal is cheaper and a positive one means CPC is cheaper. If CTR is 0 there are no clicks, so the CPC bill is 0 and the effective CPC shows 0 rather than infinity. Amounts are in dollars; read them in your own currency.

Worked example

A campaign of 200,000 impressions with a CTR of 1.2% produces 200,000 × 0.012 = 2,400 clicks. Under a CPM of 4: 200,000 ÷ 1000 × 4 = $800.00. Under a CPC of 0.50: 2,400 × 0.50 = $1,200.00. Effective CPC of the CPM deal = 800 ÷ 2,400 = $0.33, below the 0.50 asked, and effective CPM of the CPC deal = 1,200 ÷ 200,000 × 1000 = $6.00, above 4. The difference is -$400.00, so CPM is cheaper at this CTR. At a CTR of 0.5% the result flips: CPC costs $500 against $800.

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Common mistakes

  • Entering CTR as a decimal such as 0.012. The field takes percent, so 0.012 means 0.012% and the click count will be 100 times too low.
  • Typing the CPM as the price of one impression. CPM is already the price for 1,000 impressions, so a CPM of 4 means $0.004 each.
  • Reading the sign of the difference backwards. It is CPM cost minus CPC cost: negative favours CPM, positive favours CPC.
  • Treating one CTR as certain. The winner changes with CTR, and the break-even is where CTR equals CPM ÷ (CPC × 1000) as a fraction (0.8% here), so test a range of CTR values.
  • Comparing prices from different counting rules. Impressions and clicks are counted differently by each ad platform, so a predicted CTR from one network may not hold on another.

Sources

About this calculator

CPM (cost per mille) charges an advertiser a fixed price per 1,000 impressions regardless of clicks, while CPC (cost per click) charges only when someone actually clicks the ad. The two can be compared directly by converting one into the other using the click-through rate (CTR): effective CPM = CPC × CTR × 1,000, and conversely effective CPC = CPM ÷ (CTR × 1,000).

Digital marketers and media buyers run this comparison to decide which pricing model gives a better cost per outcome for a specific campaign and CTR, since a high-CTR campaign often favors CPM pricing while a low-CTR one usually comes out cheaper under CPC — and publishers use the same math from the other side, deciding which pricing model to offer advertisers for a given ad slot.

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Comments (1)

  • Editorial team

    The two prices tie at a break-even click-through rate equal to the CPM divided by ten times the CPC, in percent. With a CPM of 5 and a CPC of 0.50, that is 1%: a higher CTR favours CPM, a lower one favours CPC. The comparison counts media cost only, not conversions. Which CTR do you actually see on your placements? Share it with the figures you compared.

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