Margin calculator for media budget

HelloGooner09​,

You need to separate CPM as a fixed cost, then preserve margin as a fixed cash value and adjust the margin percentage based on the reduced base after CPM is removed.

Definitions:
T = total budget
m = margin %
CPM = cost per 1,000 impressions
Impr = impressions

Step 1 CPM cost
CPM_cost = (Impr / 1000) * CPM

Step 2 fixed margin amount
Margin = T * m

Step 3 media budget
Media = T - CPM_cost - Margin

Step 4 adjusted margin % for platform input
Adjusted margin % = (T * m) / (T - CPM_cost)

Example:
T = 10000
m = 20%
CPM = 1.5
Impr = 2000000

CPM cost = 3000
Margin = 2000
Media = 5000

Effective margin on remaining base = 2000 / 7000 = 28.57%

Key point:
The nominal margin (20%) stays fixed in cash terms, but the required margin percentage increases because CPM reduces the base that the margin is applied to.