Bidding Model Cost Comparison

How to calculate CPM vs CPC cost comparison calculator?

Determine the equivalent cost of paying per click (CPC) for 1,000 impressions using your expected click-through rate (CTR), then compare that to the CPM price.

Key formula: CPM_equivalent = CPC × (CTR% / 100) × 1000

Using the CPM vs CPC cost comparison calculator calculator: an example

Example values: CPM = $5.00; CPC = $0.50; CTR = 1%.

Step-by-step calculation:

1. Calculate clicks per 1,000 impressions: 1000 × (CTR% / 100) = 1000 × 0.01 = 10 clicks.
2. Compute cost via CPC: 10 clicks × $0.50 = $5.00.
3. Compare to CPM: CPM = $5.00, so at 1% CTR both models cost the same.
4. Check another CTR (for example 2%): 1000 × 0.02 = 20 clicks → 20 × $0.50 = $10.00, so CPC is costlier and CPM is cheaper at that CTR.

Frequently Asked Questions

What does CPM mean?

CPM stands for cost per mille and represents the price to buy 1,000 ad impressions. Use it when you pay for impressions rather than clicks.

When is CPC more cost-effective?

CPC is more cost-effective when CPC × (CTR% / 100) × 1000 is less than the CPM price. Use the calculator to find the break-even CTR for your rates.

Should I enter CTR as a percent or decimal?

Enter CTR as a percentage (for example, enter 1 for 1%). The formula divides the percentage by 100 to convert it to a decimal for the calculation.