Correct CPM calculation
  • CPM was listed in the eCourse as:


    This formula is incorrect:

    CPM α Impressions/Revenue (1000 is just a constant)

    CPM = k (Impressions/Revenue)

    Therefore as revenue increases, CPM decreases
    As impressions increases, CPM increases.

    This formula is completely backwards! CPM should be:

    (Revenue * 1000)/Impressions i.e. the inverse of what's written in the course

    Try this and you'll get what you're looking for!
    Post edited by Unknown User at 2011-11-16 11:24:31
  • Thanks for that catch. I also like to look at Revenue per unique visit as an important metric to determine effectiveness of monetization of a site.
  • Thanks for the tip Chris, anything to be aware of when using this metric?
  • Sites that use advertising (adsense, affiliate networks, etc.) are most likely going to be in the $0.10 to $0.20 range. If a site is claiming more than $0.20 per unique visit, be cautious.