Media Buyer For Hire

Believe it or not, I have received a decent volume of search query traffic for the different Advertising cost models out there, so I have decided to put up a quick primer and calculation for each formula to help media buyers/planners out. A little bit of me giving back to the advertising community for those who still don't know the difference between models, how to calculate these formulas, and are afraid to ask:

CPM - Cost Per thousand iMpressions
For example, a $15 CPM would mean for every 1,000 impressions purchased, the advertiser would owe $15.
Cost = (Rate X Impressions)/1,000
$15CPM X 1,000,000 Impressions/1000 = $15,000 in media spend
Most popular for display/banner advertising (especially in today's ad market), least popular for DR advertisers

CPC - Cost Per Click
For example, a $1.50 CPC would mean that for every click on an ad, the advertiser would owe $1.50
Cost = Rate X # of Clicks
$1.50 CPC X 432 clicks = $648 in Click expenditure
Most popular for search/content networks/and text link ads

CPA - Cost Per Acquistion (aka CPSale, CPOrder, CPInquiry, CPLead)
For example, a $40 CPA would mean that for every acquisition generated from the advertisement, the advertiser would owe $40
Cost = Rate X # of Acquisitions
$40 CPA X 75 sales = $3,000 in advertising commissions/bounty
Most popular cost model for DR advertisers, least popular with Publishers

Any questions or clarifications, please let me know - steve [at] mediabuyerforhire.com