Answers the Question
How much can I earn from banner ads on my website?
Calculator for CPM
What Is the CPM?
There are many different methods for earning money from websites. One of the most popular is to display ads, billing advertisers a small bit for each impression or time it is displayed to visitors.
This method isn't always the more profitable for the vendor. Nevertheless, the ease with which it can be implements and understood by both website owner and advertiser has caused its popularity to skyrocket.
The acronym CPM stands for cost per mille, with the word mille being Latin for the English word thousand. In other words, CPM means "cost per thousand."
Why Is it Important?
- CPM is an industry standard for advertising on the web. The price paid for a single impression is often so low, that everyone just finds it easier to deal with thousands of impressions at a time.
Formula(s) to Calculate CPM
- TOTAL COST = IMPRESSIONS / 1000 / CPM
- Decimals often get shifted around when conducting CPM calculations by hand. This can lead to wildly incorrect pricing.
- Many website operators believe that only one advertisement is allowed per page. Many advertising firms do place limits on the number of ads allowed on a given page, but this number is rarely equal to one.
- Many advertisers and website owners would be better off charging per conversion, rather than per display. Under CPM pricing, website owners have little incentive to ensure that ads are shown to the most ideal visitors.