CPM is mostly used for brand campaigns rather than efficiency campaigns. This is due to the lack of conversion. Marketers most often give up CPS and other models of value in favor. We will explain in the article how CPM is connected with marketing and fits into your campaign. Moreover we will talk about when and how to use CPM in marketing more properly and efficiently.
Being not yet experts in marketing you may have a question about what the letter M means and why it is used in the term. In the abbreviation CPM M is a mille, which in Latin translates as a thousand.
By definition CPM («Cost Per Mille» or «Cost Per Millenium») is the cost of thousand or millenium advertisement screenings. Each 1000 advertisement impressions will cost users a fixed amount for the advertiser.
In your advertising cabinet you will be able to assign parameters targeting many aspects depending on the service. For example, it may be the parameters of the target audience that is more likely to be interested in the product or service, geography, platform devices and more.
To calculate CPM the CPM, you must use this formula:
CPM = (COST / IMPRESSIONS) * 1000
That is, in order to know the price for 1000 impressions you need to define two main indicators:
With a preliminary calculation using this formula, you will be able to choose the right bet for yourself to launch a campaign. During the launch you can adjust your rates so that your ad can be placed on a more profitable advertising place on the site.
The notion of a good CPM depends on many aspects: the type of advertising platform, the type of advertising network (Google, media advertising, search, advertising in social networks and others). Currently, the average CPM of Google search ads is 38.40 dollars. The United States of America, while the Google Media Network has an average CPM of U.S. $3.12.
When comparing CPM with other models, such as CPA and CPC, CPM is much cheaper. When using the CPM model, you have the opportunity to get much more impressions for little money than getting results from other campaigns using other models.
CPM is the method used for pricing online advertising. Unlike this model, others operate on a click-cost basis, such as CPC. In this model, the advertiser pays every time users click on an ad on the website page. There is also a model of cost per acquisition – CPA. With this model, the advertiser pays every time the visitor of the website not only passes over the advertisement, but also makes a purchase.
Many website publishers prefer to advertise CPM, as in this case they only get money for advertising. However, good CPM earnings require good and reliable traffic, so CPM rates relative to other models are very low.
But all this the tariffs for advertising on social media platforms are higher. The average CPM advertising on social media for Facebook in 2023 was $7.19. The average CPM for Twitter in 2022 was around $6.60.
Thus, everyone can choose a suitable method of pricing. If you want to increase brand recognition or have a purpose to deliver a specific message, then use CPM.
The speed of the CPM can be influenced by very different factors. The main factors include the selected advertising format, platform, targeted audience, etc. Also, CPM indicators are affected by the season, month, etc., as there can be attachments to holidays, which affect users’ impressions.
Also the speed of your CPM is affected by duplicate views and bots that twist them. Thus, the ad will become less valuable for advertisers. You need to make sure that your experience does not increase with bots and spam.
The CPM can work specifically with various social networks and websites. You need to make sure that the algorithm correctly allocates your budget if your campaign is combined. For example, if you add videos, graphics and so on in the same set of ads. By checking the reports, you will not let Facebook spread your budget, but you’ll be monitoring the distribution of funds across platforms. Be careful, Facebook can blow your budget to fill inventory that no one buys.
When working with YouTube, be sure to watch how your advertisements are placed on different devices. Try to take into account all the specifics of YouTube usage by users. For example, an adult phone video can often be watched by children. Then your campaign won’t work for them and it won’t go unnoticed. You just need to carefully consider such nuances and adjust campaigns to the right audience.
CPM (cost per thousand) is a marketing model where the advertiser pays for every thousand advertisements on the site. Impressions in this model are a key indicator that counts the number of views of ads.
It is the CPM model that is one that is used for pricing online advertising, other models include other indicators.
There may be problems when working with the model, as the calculation of impressions may not always be correct. This can occur due to advertising fraud or the appearance of duplicate views.
When working with this model, you should understand that there is no point in overpaying, when you can get more screenings at a lower price.
CPM is an expensive method of payment for advertising, which is not suitable for every business. Before you start working with it, assess all the risks, calculate the potential results and decide whether it will suit you.
Table of Contents