Ad Auction Core Formulas
- CPM (Cost Per Mille):
(Total Ad Spend / Impressions) × 1,000 - CPC (Cost Per Click):
Total Ad Spend / Clicks - CTR (Click-Through Rate):
(Clicks / Impressions) × 100% - Relationship:
CPC = CPM / (10 × CTR)
1. Understanding Ad Auction Dynamics
Modern ad networks use Vickrey-style automated auctions. Higher creative click-through rates (CTR) reward advertisers with lower effective CPCs because ad platforms monetize impressions, not clicks. Higher CTR means the platform makes more money per 1,000 impressions served.
2. Interactive CPM/CPC Calculator
Plan your impression volume and ad budget with real-time feedback: