Most of publishers and PPC services based their pricing rates on CPM, for example, the New York Times banner services starts at an $8.00 plus additional targeting layers. However, our digital marketing plans are mostly CPC (or CPA) oriented… given that, a common question is how do I pass from CPM to CPC?
Let’s see an easy example of how to compare CPC and CPM services using Facebook Ads:
1. First of all, lets set the CPM ads option at some of our ads: Open (or create) any Facebook campaign you have already active on your Facebook ads panel
2. Move into (or create a new) advert set. Once there, click edit (pencil logo – first of the top right corner logos).3. Afterwards, click on “Show advanced options”
4. Then, change the pricing option to “Optimized per impressions” (usually this field is set as “optimized per clicks” as default)
5. After this, you will see a proposed price, in my case CPM – 0.69 USD. Which means that I will have to pay 0.69 USD per 1,000 impressions
5. Considering that my CTR on this campaign goes from 0.5% to 2%, it means:
CTR 0.5% -> 1,000 impressions X 0.5 / 100 = 5 clicks
CPM = 0.69 USD, it means I will have 5 clicks per 0.69 USD, in other words, a CPC of 0.69/5 = 0.13 USD
CTR 2% -> 1,000 impressions X 2 / 100 = 2o clicks
CPM=0.69 USD I will get 20 clicks, in other words, a CPC of 0.69/20 = 0.03
On average, I can expect to get clicks from $0.13 to $0.03, which is very good actually.
Given this, you may think… what happens if this is the first time I use this service and I have no reference of my CTR? In that case… just ask it! Publishers technical teams should have an average CTR of their banners which can make you guess the number of clicks you will have with a certain budget