What is CPM?

CPM stands for Cost Per Mille, which means your ads will be served 1,000 times to a specified audience. The more you pay per mille (CPM), the better exposure your ad will receive. A lower cost per mille may not generate as many views of your advertisement. It’s important to consider how much you are willing to invest in order to promote an idea or product, and what kind of return on investment you want from each marketing campaign.

How does CPM work?

CPM is the most common type of online advertising metric because it accounts for how many times your ad is viewed. Instead of just looking at how effective an ad was, CPM considers the reach and frequency of your campaign.

For example, if you have a campaign that reaches 1,000 potential customers every day but only 10% click on your advertisement, then you are better off spending more money to promote your product to a smaller audience who may purchase from you.

On the other hand, if 90% of the people who view your ad choose to follow through with purchasing or registering on your website, then investing in reaching more people becomes worthwhile.

How much does CPM cost?

CPM costs vary according to factors like industry type, how extensive your target customer base is, and the time of year you are advertising. Bigger companies can pay upwards of $7 or more per 1,000 ads viewed while smaller companies usually only pay between $0.50 – $1 for the same ad exposure.

Another aspect to consider is whether you want CPM on a cost-per-click (CPC) basis or viewable video ad impression basis. Viewable impressions are based on whether an advertisement shows up on someone’s screen when they are surfing the web even if they don’t click on it.

Generally speaking, people will expect to see higher CPM rates on CPC because of its ability to drive traction towards your product(s). For example, click-through rates are usually below 0.1% which means you have to pay for at least 1,000 impressions to get the attention of 1 person which costs about $0.35 – $0.75 per CPM rate.

It ultimately comes down to how much money you want to spend on your marketing campaign, and whether or not you want a better return on the individual customer level or just reach as many people as possible regardless of whether they choose to purchase from you or not.

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