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Rotation, Clicks and CTR% in CPM Planning (31.07.2014)

Different websites have different amount of visits and we have to keep this in mind when working on a media plan. Popular websites, build for and used by the large audience, generate a huge amount of Impressions on a daily base. www.abv.bg is a good example, which home page generate 1 800 000 daily Impressions. In order to compare it, the home page of a niche website like www.kulinar.bg (which audience is mainly composed of food and cooking enthusiasts), generates 15 000 daily Impressions. Having in mind this in order to proceed further we have to explain another important term of the CPM planning – Rotation.

Rotation is a percentage (%) of Impressions we are willing to buy from the total amount of Impressions a webpage or a website generates. Most commonly advertisers in Bulgaria are buying Rotation between 10%-30%.

Example: We would like to buy 15% Rotation on home page of www.abv.bg, regular banner 300 x 250 – the price for 1 000 Impressions (CPM) for this webpage and this banner format is 5 BGN and the Impressions this page generates on daily base are 1 800 000. The daily budget would be 1 350 BGN.

Calculation explained:                 

(1 800 000 daily Impressions * 15% Rotation) х 5 BGN / 1 000 = 1 350 BGN daily budget

I order to calculate the budget for a longer period, let’s say a couple of days, we only have to multiply the daily budget by the number of days our campaign is going to be.

1 350 BGN daily х 5 days = 6 750 BGN for 5 days

When talking about campaign effectiveness in online planning, regardless if we are talking about CPM planning, CPC or any other type – CTR% is one of the most important factors to be considered and monitored. But before we get into CTR% and how is it calculated, we have to explain another important parameter – Clicks!

Clicks are a very important metric which count the number of clicks by users on our ad. When a user clicks on an ad he/she is being led to the brand’s website or a webpage. Clicks on ads are counted as the Impressions – regardless of the number of unique users that generated them. 1 user can generate 10 clicks on an ad only by himself / herself and 10 users can generate 1 click only each – in both cases we will be counting 10 Clicks.

CTR% is an abbreviation of Click Through Rate – it measures the ratio of realized Clicks to the generated Impressions of an ad.

Example: If on an ad has been clicked 1 000 times by users and the ad has been displayed 1 000 000 times to users (generated Impressions), the CTR% would be 0.10%.

Calculation explained:

(1 000 Clicks  / 1 000 000 Impressions) * 100 = 0.10%

The higher the CTR%, the more effective the ad is! The average CTR% among CPM campaigns using regular banners in Bulgaria is between 0.10% - 0.18%.