If you’re in the marketing or advertising industry, you’re probably familiar with the terms CPC, CPM, CPA, CTR, CPL, CPI and CPV? Start thinking about your business marketing expenses and how you can reduce them?. we’ll give you tips on calculating the cost of different marketing channels. This information can make you informed decisions about where to allocate your budget and optimize your campaigns for maximum return. we’ll explain each term and how it can be used in marketing.
What is CPC, CPM, CPA, CTR, CPL, CPI and CPV?
CPC stands for cost per click and is the price an advertiser pays when someone clicks on one of its ads.
CPM stands for cost per mile/thousand impressions and is the price an advertiser pays when someone views one of its ads more than once.
CPA stands for cost per action and is the price an advertiser pays when someone takes one of its actions, such as signing up for a mailing list or making a purchase.
CTR stands for click-through rate and is the percentage of people who clicked on an ad after seeing it.
CPI stands for cost per Install/impression and is the price advertisers pay to reach 1,000 people with their ad message.
CPL stands for cost per lead and is the price advertisers pay to reach 10 people with their ad message.
CPV stands for cost per visit/view and is the price advertisers pay to reach 100 people with their ad message.
How to Calculate CPC, CPM, CPA, CTR, CPL, CPI and CPV?
There are many ways to calculate CPC, CPM, CPA, CTR, CPL, CPI and CPV. Below is a brief explanation of each calculation method with examples.
CPC (cost per click) is the total cost incurred by an advertiser for every click on an ad that leads to a sale. It includes the cost of the ad, any applicable commission fees paid to the advertising network, and any other costs associated with the ad campaign.
FORMULA [ CPC = Total Cost / Number of Clicks ]
CPM (cost per thousand impressions) is the total cost incurred by an advertiser for every 1,000 impressions of an ad. It includes the cost of the ad, any applicable commission fees paid to the advertising network, and any other costs associated with the ad campaign.
FORMULA [ CPM = (Total Campaign Spend / Number of Impressions) * 1,000 ]
CPA (cost per action) is the total cost incurred by an advertiser for every action taken by a visitor on a website after seeing an ad. This includes both successful conversions (clicks that result in a sale or sign-up) and unsuccessful conversions (clicks that do not result in a sale or sign-up).
FORMULA [ CPA = Cost to the Advertiser / Number of Conversion ]
CTR (click-through rate /conversion rate) is the percentage of visitors that actually click on the ad who convert into customers
FORMULA [ CTR = Total Measured Clicks / Total Measured Ad Impressions x 100 ]
CPL (Cost Per Lead) A cost factor for any advertising campaign intended to obtain leads and get the users converted.
FORMULA [ CPL= Total Ad Spend / Total New Leads ]
CPI (Cost Per Install) is an advertising pricing model that is specific to mobile applications. This model places ads across many digital media platforms and only pays the publishers once there are app installs. The advertiser pays the set rate only when there are app installs.
FORMULA [ CPI = Total Ad Spend / Number of Installs ]
CPV (Cost Per View) Video ads can be charged based on the number of views or interactions the advertiser receives. A view consists of watching 30 seconds of a video ad, clicking on one of the call-to-action overlays, banners or cards, or setting up a CPV bid for the maximum amount an advertiser is willing to pay for each view.
FORMULA [ CPV = Total Ad Spend / Total Number of Views ]