World is changing into an different aspects on everything. All the traditional way is changing into a digital world. Digital Advertising is one among them.
What is impression?
In Advertising, impression is called the ad is loaded on the page when the user visits the web page. Previously, impression will be counted when the ad is released from the ad server. Now, technology changes every definition, impression will be counted only when the ad is downloaded on the browser/APP now.
How to calculate Impression?
Impressions are calculated by CPM. Your next question is what is CPM?
What is CPM?
CPM is Cost per mille. Which means cost per 1000 impressions. Generally publisher or website owners sell their inventory (ad Space) based on 1000 impressions.
Formula for CPM = (Cost / Impressions) * 1000
Example: If budget $100, Total amount of Impression allocated by publisher is 10,000. Then CPM rate is $10. See below
CPM = (100 / 10,000) *1000
What is CPC?
CPC is called Cost per Click. The advertiser or agency will pay the amount based on the number of clicks. This is directly proportional to the number clicks and cost which fixed for each click.
Formula for CPC = No of Clicks * Cost of each Click
Example: In Publisher website, Ad received 10 clicks and advertiser quoted $2 for each click. Then CPC is for the ad/ campaign is $20.
CPC = 10 * 2
What is CPA?
CPA is called Cost per Action / Acquisition. Agency or Advertiser will pay based on the action which done through the Ad. Which is similar to CPC campaign.
Formula for CPA = No of Action done * Cost of each Action
Example: Advertiser will set price to publisher like if, one of his product is sold , agreed to give $10 per product to the publisher.
if 10 products sold from the campaign/ ad then the CPA is $100.
CPA = 10*10
Note: For CPA Publisher needs to be spend the impressions wisely otherwise he will get negative margin.
Example: If he spend more than 10CPM, Publisher will not get no gain as the CPA rate is $10. If he convert or sell product less than the CPA price remaining would be gain for Publisher.
Hope this Helps!!!!!!